The National Conference of State Legislatures released a report last thursday highlighting the fiscal health of states and the budget pressures that exist for states regarding some key programs. The report noted that in FY 2003, 31 states faced budget gaps after the fiscal year began, however this year only 3 states found themselves in that situation. Despite this fact, Medicaid and other health costs continue to cause increasing financial pressure for states, and while state tax revenues have been able to cover most costs this year it may not work out as nicely in the years to come -- as the report says 26 states are facing shortfalls as they put together their FY 2006 budgets. More on the report can be read here.