States are facing a great fiscal crisis. At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.
Figure 2 shows the size and duration of the deficits in the recession that occurred in the first part of this decade, and estimates of the likely deficits this time
This recession is more severe — deeper and longer — than the last recession
Many States are already scurrying to cut unwanted costs
cut State-funded programs
not issue tax refunds to their citizens, and borrow money just to survive in 2009
Unfortunately, many banks — the same banks the Fed bailed out — are refusing to loan money to the States and their Treasury agencies
No State has ever filed bankruptcy, but it could be coming to a State near you this year.
clipped from: www.cbpp.org 
