- State Budget Crises Threaten U.S. Economic Recovery
- Money Morning Mailbag: State Budgets Far From Healed After Recession
Some 48 states are emerging from a round of painful budget cuts for their 2010 fiscal budgets, and at least 46 states face shortfalls for the upcoming 2011 fiscal year, which in most states began July 1.
The recession has caused the steepest decline in state tax receipts on record - and states will continue to struggle to find the revenue needed to support critical public services for a number of years as a result.
Since virtually all states are required to balance their operating budgets each year they cannot maintain services during an economic downturn by running a deficit, as the federal government does.
Question: Which of the states are doing best and worst?
Answer: The first 9 months of 2009 handed states the biggest revenue decline in history and the bleeding hasn't stopped. The Center on Budget and Policy Priorities (CBPP) estimates state budget gaps will grow to $350 billion over the next two years, with every state in "fiscal trouble" except Montana and North Dakota. California is projected to hit $20 billion and New York $9 billion.