COLUMBUS, Ohio - The finances of many states have deteriorated so badly that they appear to be in a recession, regardless of whether that's true for the nation as a whole, a survey of all 50 state fiscal directors concludes.
The situation looks even worse for the upcoming fiscal year.
"Whether or not the national economy is in recession - a subject of ongoing debate - is almost beside the point for some states," said the report to be released today by the National Conference of State Legislatures.
The weakening economy is hitting tax revenue in a number of ways: People's discretionary income is being gobbled up by higher food and fuel costs, while the tanking housing market means people are spending less on furniture and appliances associated with buying a house.
The situation is grim in Delaware, with a $69 million gap this year, and bleak in California, with a projected $16 billion budget shortfall over the next two years, the report said. Florida does not expect a rapid turnaround in revenue because of the prolonged real estate slump there.
By mid-April, 16 states and Puerto Rico were reporting shortfalls in their current budgets as the revenue those budgets were built on - typically, taxes - fell short of estimates. That's double the number of states reporting a deficit six months ago.
The NCSL said the news is even worse for the upcoming fiscal year, with 23 states and Puerto Rico reporting budget shortfalls totaling $26 billion. More than two-thirds of states said they are concerned about next year's budgets.
The results are consistent with a drumbeat of bad economic news for states that several budget groups have produced in the past few months.
Last week, the Washington-based Center on Budget and Policy Priorities said 27 states are reporting projected budget shortfalls next year totaling at least $39 billion.