States are entering their third fiscal year of a sustained economic and revenue contraction. Tax revenues have been declining since the first quarter of 2009 and are likely to continue their slide through 2012. Between FY 2009 and FY 2012 state budget deficits will total $300 billion in the states over the next three years. In FY 2011, states face a cumulative budget gap of $89 billion. Federal stimulus funds will be largely exhausted in the coming fiscal year with state source revenues unlikely to return to their pre-recession level. While this recession delivered a severe shock to state economies and revenues, the fiscal crisis in the states has developed over decades.