"After nearly three years of economic recovery, the crisis in state and local budgets continues to worsen.
Even though state tax revenues are picking up, mandated spending obligations and the loss of federal stimulus money still put heavy pressure on state finances.
For fiscal 2012, 44 states and the District of Columbia, project budget shortfalls totaling $112 billion, says the CBPP. These gaps come at a time when rainy-day reserves are essentially depleted and federal assistance under the Recovery Act, which had played a big role in closing earlier shortfalls, is set to drop by more than $50 billion.
"The Economic Policy Institute (EPI) estimates that each $1 of spending cuts at the state and local level results in $1.41 of lost economic activity and more than 18,000 lost jobs. Using EPI estimates, economists at UBS say that $50 billion in budget cuts in the coming year would result in around 630,000 job losses at state and local governments—on top of nearly 500,000 already lost since August 2008—plus another 270,000 in the private sector"..................LINK