WASHINGTON - January 29, 2009 - 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.

States are currently at the mid-point of fiscal year 2009 - which started July 1 in most states - and are in the process of preparing their budgets for the next year. Over half the states had already cut spending, used reserves, or raised revenues in order to adopt a balanced budget for the current fiscal year. Now, their budgets have fallen out of balance again.  New gaps of $46 billion (over 9% of state budgets) have opened up in the budgets of at least 42 states plus the District of Columbia. These budget gaps are in addition to the $48 billion shortfalls that these and other states faced as they adopted their budgets for the current fiscal year, bringing total gaps for the year to over 14 percent of budgets.

The states’ fiscal problems are continuing into the next two years. At least 41 states have looked ahead and anticipate deficits for fiscal year 2010 and beyond. These gaps total almost $88 billion - 16 percent of budgets - for the 34 states that have estimated the size of these gaps and are likely to grow as gaps are re-estimated in the next few months.

Ed. Note: If you research your State’s Comprehensive Annual Financial Report you will find out that your State has much more money than it needs.