It's Bad All Over

According to the National Conference of State Legislatures'

"State Budget Update: April 2008":

"With a few exceptions, state finances are deteriorating, in some cases considerably. This development has presented many state lawmakers with a twofold problem: keeping their fiscal year (FY) 2008 budgets in the black and enacting balanced budgets for FY 2009.

Current state fiscal conditions are being driven by weak revenue performance. State officials expected revenue growth to slow in FY 2008, but not as dramatically as it has. Since the November 2007 edition of this report, revenue problems have grown and budget holes have deepened. Whether or not the national economy is in recession—a subject of ongoing debate—is almost beside the point for some states because their fiscal situations have declined so much that they appear to be in a recession.

Because most FY 2008 budgets were built on revenue forecasts that are not materializing as expected, budget gaps have grown. In November, seven states and Puerto Rico reported shortfalls. That number rose to 16 states and Puerto Rico by mid April. Collectively, these gaps totaled at least $11.7 billion.

The situation is worse for FY 2009: Budget gaps have emerged in 23 states and Puerto Rico, and collectively they exceed $26 billion. Again, slowing or declining revenue is the principal reason. In fact, two-thirds of the states are concerned about FY 2009 revenue performance. Four states are pessimistic."

Order the report from NCSL