06/15/2010 11:12 am ET Updated May 25, 2011

States Face $127 BILLION Budget Shortfall As Stimulus Dries Up

Spending cuts by state and local governments from New York to California may act as a drag on the economy into 2011, only the second time in more than a half century that such reductions have restricted growth for three consecutive years.

States face a cumulative budget gap of $127.4 billion as 46 prepare for the start of their fiscal year on July 1, according to a report this month by the National Governors Association and the National Association of State Budget Officers.

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