A year ago Reports was eating crow. Having declared that fiscal year (FY) 2008 was as bad as it could possibly get, the data for FY 2009 proved that it could get worse. This year things look better. The economy is growing, jobs are being created and state fiscal conditions are improving. Risks remain, primarily in the form of the federal government, which is in the process of weaning states from the additional federal assistance it provided as part of the economic recovery program. On top of that, the growing preoccupation with taming the federal budget deficit puts states at continued risk through the remainder of this fiscal year and going forward. So the question now becomes whether the good news reported here is real, or just a hiccup before the next wave of bad news hits.