44 States Have Huge Projected Budget Deficits

Texas is one of six not on the list:

At least 44 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well.  Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.

44states

Mish over at Global Economic Trend Analysissays it is worse than it looks:

As bad as those numbers look, I suggest the numbers are overly optimistic. California alone has raised its budget deficit projection several times from $4 billion, to $8 billion, to $14 billion, and that is just for fiscal year 2009. The California 2010 deficit is now projected to be $25 billion, a whopping 24.8% of the Fiscal Year 2009 General Budget. However, how can anyone have any confidence in the numbers when the projected deficit is revised higher every month?

Remember that economists are expecting housing to bottom in 2009 and the recession is also expected to end soon followed by a weak recovery. Of course those same economists predicting a housing recovery have predicted a second half housing recovery for the last 3 years and most of them did not think the US would slide into a recession.

I do not think housing prices bottom until 2012 given massive inventory and soaring unemployment. Furthermore, I expect any recovery will be exceptionally weak, assuming there even is a recovery.

The key point is the trend is for worsening state budget projections, and there is no reason to expect that trend to reverse.

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