The WSJ is reporting that at least 10 states are considering some kind of major tax increase during this year to combat precipitously falling income: Arizona, Connecticut, Delaware, Illinois, Massachusetts, Minnesota, New Jersey, Oregon, Washington and Wisconsin. Including those 10, California and New York have already voted into effect multi-billion dollar tax increases. A couple of quotes from the article:

Fiscal experts say more states are likely to try to raise tax revenue in coming months, especially once they tally the latest shortfalls from April 15 income-tax filings, often the biggest single source of funds for the 43 states that levy them.

The squeeze is especially severe in states hit hardest by the recession, such as Arizona, where sales-tax revenue has fallen by 10.5%, income-tax collections are down 15.7% this fiscal year, and the government faces a $3.4 billion budget gap next year. But such shortfalls are likely to be widespread; federal income-tax receipts from individuals have dropped more than 15% in the past six months, according to Congressional Budget Office estimates.

…

“With the size of our budget gap, we are looking at a situation of closing down our courts, releasing prisoners and cutting the school year by as much as a month,” said Rep. Peter Buckley, co-chairman of Oregon’s joint Ways and Means Committee.

Josh Barrow, a staff economist at the Tax Foundation says that  “recession is the worst time that you can raise taxes…[with] income taxes being especially economically damaging and may force low income families to move to [cheaper] states.”

These increases in state taxes also do not take into account job losses caused by State institutions (like public universities) being forced to cut back on their budgets. It looks as if any positive affects that federal stimulus targeted toward individuals would have had will all be washed away by a flood of new state sales and income taxes this year.