From Bloomberg.com:
U.S. state government collections fell 16 percent to almost $1.7 trillion in fiscal 2008 from a year earlier, while spending increased 6.2 percent, according to the U.S. Census Bureau.
The biggest drop came in so-called insurance trust revenue, which slid $377.7 billion, or 73 percent, the federal agency reported today. Such funds include public employee retirement systems, unemployment compensation and worker compensation funds, many financed with payroll taxes and other worker contributions, according to the bureau.
Spending exceeded $1.7 trillion for the combined states, according to the report. Education, at $546.8 billion, public welfare, $412.1 billion, and highways, $107.2 billion, consumed almost two-thirds of the outlays, the Census Bureau said. State records showed lottery sales rose 1.8 percent from the previous year, to $77.3 billion.