Two reports this week heavily underscore the need for businesses to keep a close watch on state tax issues.

Measures of the business-friendliness of U.S. jurisdictions usually focus on straight tax rates, but Forbes breaks from the pack with a look at state tax burdens based on a simple, rough-and-ready metric: the number of private-sector workers compared to the number of government workers and needy people in each state.

Authors William Baldwin and Kurt Badenhausen used state and local government employment numbers plus Medicaid rolls as a rough indicator of the supported population. They also took into account government pensions. Taxpayers “have to maintain not just active employees but also government retirees in the style to which they have become accustomed,” they point out.

The states with the highest tax burdens, by this measure, are: New Mexico, Mississippi, New York, Louisiana, and California, in that order.

“Employers should keep an eye on these burden ratios,” Baldwin and Badenhausen advise.

Indeed. And they should also keep an eye on the fiscal health of the states they do business in, because several of them are heading for California-style budgetary chaos, according to a study from the Pew Center on the States. “The same pressures that drove the Golden State toward fiscal disaster are wreaking havoc in a number of states, with potentially damaging consequences for the entire country,” the Center notes. California tops Pew’s list of states in fiscal peril, followed by Arizona, Rhode Island, Michigan, and Oregon.

California’s budgetary woes have led to some fairly, let’s say, radical tax proposals to fix the state’s fiscal mess, as I noted here and here. Other states are relying on more traditional strong-arm tactics to bridge the revenue shortfalls they accumulated in the downturn. New York, for example, is going after tax debtors ranging from JPMorgan Chase to Manhattan strip joints, and using new technologies to do so, the New York Times reported Tuesday in this story (requires registration). ###