From the NY Times...

Red Ink in States Beginning to Hurt Economic Recovery

Having already stripped the nation of a source of economic growth, the budget crises in California and in almost every other state are now beginning to drag down the national economy, prolonging the weak, jobless recovery, the latest budget numbers show.

Over the past two years, the states have gradually cut between $20 billion and $40 billion -- no one knows exactly how much -- from their spending. Billions more in cutbacks are coming in the fiscal year that started July 1.