Depressed economy wallops states

Staggered by turbulent financial markets and anxious about a rapidly slumping economy, many state governments are slashing their budgets, frantically trying to stay afloat.

After two years free of major fiscal worries, state policymakers in 2008 were hit by a triple-whammy: a Wall Street meltdown that made it more difficult and costly to borrow; a record number of home foreclosures that took a big bite out of tax revenues; and soaring oil and gas prices that squeezed budgets of all but the energy-producing states.


…The year began with governors unveiling bold proposals that went nowhere as the housing market tanked and the economy deteriorated. Most notable, perhaps, was Republican California Gov. Arnold Schwarzenegger