States looking for ways to reduce budget deficits Â– that's at least 40 of them, according to the National Association of State Budget Officers Â– are getting creative about finding new funding.
Connecticut wants to tax its way out of a $1 billion shortfall, in part by slapping a new levy on snacks. "It could be pies or cakes or confections of some kind," Democratic state Sen. Martin Looney said recently, adding that the sales tax already applies to candy. Lawmakers called the proposed tax a disincentive for childhood obesity.
California lawmakers, facing a $17 billion budget deficit, are considering a similar "junk-food tax" plan to pay for new health and education bills.
In hurricane-prone Hawaii, the governor wants to use half of the Hurricane Relief Fund to help close the state's $315 million budget shortfall.
Adjusting for tax-law changes and inflation, state tax collections shrank 4 percent between October and December last year. At the same time, expenses have grown, especially for schools coping with growing student populations.
In many states, legislators hope to forestall income-tax hikes or further budget cuts. They have already raised excise taxes on cigarettes and liquor, leaving them few options.