South By North Strategies, Ltd.

Off the Charts says that it is too soon to know if state finances have “turned the corner.”

The combination of sluggish revenue growth, diminishing federal aid, and rising costs means that states will face their biggest fiscal challenges ever next fiscal year, which starts next July in most states.  Already, states are projecting $112 billion in shortfalls for fiscal year 2012, as we reported earlier this month, and we expect that figure to grow.
…
In short, the worst is far from over.  States are going to need to put everything on the table when they write next year’s budgets — and that should probably include changing state tax codes in order to replace some of the recession-induced revenue loss.