State budgets walloped again

State budgets walloped again

Revenue shortfalls lead to new budget gaps only three weeks into the new fiscal year. States are forced to make more painful budget cuts.

NEW YORK (CNNMoney.com) -- The bad news about state budgets just keeps getting worse. Only three weeks into the new fiscal year, gaps are already opening up. And the shortfalls are only expected to grow.

"If you think legislators are breathing a sigh of relief because their budgets are passed, think again," said William Pound, executive director of the National Conference of State Legislatures.

State legislators and governors had to contend with deficits totaling $142.6 billion as they closed out fiscal 2009, which ended on June 30 for 46 states, according to the conference. Three states have yet to pass balanced budgets for fiscal 2010, as officials tussle over painful budget cuts and tax increases.

But even some states that approved budgets are going back to the drawing board as revenues drop faster and more sharply than they had estimated.

Legislators from around the country, who are meeting in Philadelphia, gathered Tuesday to discuss their common plight. Gallows humor was abundant, according to Corina Eckl, director of the conference's fiscal program.