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States still hurting, just not as much

February 29, 2012: 10:10 AM ET

States are no longer bleeding tax revenue as they were only a year or two ago. But that doesn't mean they're out of the woods.

Some 29 states are dealing with a total budget deficit of $47 billion for fiscal 2013, according to the Center on Budget and Policy Priorities. Unlike the federal government, nearly all states must balance their budgets every year.

Though tax revenues are slowly recovering after bottoming out in 2010, they're still not back to pre-recession levels. That means some governors and lawmakers will continue to chop spending on education, health care and human services, the left-leaning center warns. The shortfalls are also threatening hundreds of thousands of jobs.

Instead, the center advocates state officials tap into state reserve funds or raise revenues through taxes. It would also like the federal government to help out the states more.

Still, all is not doom and gloom. The current shortfall pales in comparison to the red ink flowing from the states in recent years. States have had to close more than $530 billion in budget holes over the past four years.

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About This Author
Tami Luhby
Tami Luhby
Senior writer, CNNMoney

Tami Luhby is a senior writer at CNNMoney and covers income inequality, state fiscal problems, unemployment, housing policy and other economic issues. Luhby previously covered personal finance for Newsday and banking for Crain's New York Business.

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