Continuum of State Fiscal Stress
In fiscal year (FY) 2011, it was evident that states had emerged from the Great Recession and were beginning to put their fiscal houses back in order. Two significant risks remained: the loss of federal fiscal assistance in FY 2012 and a sputtering economic recovery. As FY 2012 progressed, those two risks proved formidable, as states saw some slippage in their fiscal positions. The question now is whether FY 2012 was a blip in states’ recovery or a transition into another period of fiscal distress.