A new report by the National Governors Association says: "The 50 states are facing one of the worst fiscal periods in decades."
Minnesota's financially-battered state officials can take comfort, however cold, that they have a lot of company.
A new report by the National Governors Association shows that state budgets nationwide are hemorrhaging red ink, with little, if any, relief anywhere in sight.
The bottom line in the association's July grim assessment: "The 50 states are facing one of the worst fiscal periods in decades. Fiscal conditions deteriorated for nearly every state during fiscal year 2009, and weak fiscal conditions are expected to continue" into as late as 2012.
And because the states' financial conditions have historically lagged behind the overall national economy, any recovery from the recession will only belatedly be felt in states' budgets, the report found.
While federal stimulus money that flowed into state budgets, including Minnesota, earlier this year "helped states avoid draconian levels of cuts," it amounts to a one-time cash infusion that can't be used to stave off future budget cuts, according to the report.
At the end of the fiscal year on June 30, taxes on sales and income had plummeted in Minnesota and 45 other states, the report found.
Gov. Tim Pawlenty's decision to forego tax increases and unilaterally chop the budget to cope with the state's $2.7 billion deficit puts him in the minority among the states. Twenty-nine states have enacted tax increases in an attempt to raise nearly $24 billion in new revenue.
The report also provides a snapshot that shows just how close to the bone Minnesota's state budget is operating: It's one of 16 states where year-end balances amounted to less than 5 percent of total expenditures.
And the report found that in the current fiscal year, Minnesota's general fund spending is projected to drop an estimated 11 percent -- more than in all but five other states.
One bright spot: Minnesota wasn't among the eight states, most notably California, that finished the fiscal year without a budget and have been forced to desperately patch together a variety of financial fixes.