States' Fiscal Outlook Is Still Gloomy

Report Finds More Cuts to Education Budgets Are Looming in 31 States

State finances remain as bad as they have been in decades, and the fiscal picture isn’t likely to clear up anytime soon, according to a report released last week by the National Governors Association and the National Association of State Budget Officers.

The 2011 fiscal year is shaping up to be the toughest since the recession began, the groups say: A majority of states are contemplating cutting K-12 education.

“I think there’s a sense that [states] have maxed out on tax increases, but we’re also going into a political year,” said Raymond C. Scheppach, the executive director of the Washington-based NGA. He speculated that states would largely balance their...