As I mentioned in a previous post, the federal fiscal cliff could cause a state tax fiscal cliff or disaster.  The reason being is because the states depend on the federal government to fund their programs and services. 

According to some sources, the federal government provides 20% of state budgets.  The other key factor is that the states actually HAVE to balance their budgets each year.  That means state governments have to make difficult decisions about raising taxes and/or cutting services each year, especially if they have a budget deficit.

According to sources, 48 states have had budget deficits since the 2008 recession.  A total of $581 billion in total state deficits in the last four years.

I have heard rumors of how some states may handle their budget deficit or the impact of the lack of action by the federal government, such as tax increases, expanding the sales tax base, major tax reform or tax code changes, etc. 

What have you heard?  How will your state react or respond to their budget concerns in 2013?