All but one state (Vermont) saw tax collections and other funds fall for the second quarter in a row. Over the past year, they’ve lost more than they got in federal stimulus money.
Some will need to make midyear cuts, beyond what they've sliced from their budgets already, say fiscal experts.
They've avoided the worst of the housing bust. Oil and gas revenues have helped too.
At least six governors have said they may refuse money, but will they face a backlash?
Budget shortfalls are pushing many states to raise taxes in a recession.
A bond sale this week will test whether private capital can meet California's shortfall.