State budget pictures bleak as lawmakers head back

If you thought state budgets were in bad shape last year, just wait: 2010 promises to be brutal for lawmakers–many facing re-election–as they scramble to find enough money to keep their states running without raising taxes. Tax collections continue to sputter. Federal stimulus dollars are about to dry up. Rainy day funds have been tapped. And demand for services–like Medicaid, food stamps and unemployment benefits–is soaring. As lawmakers head back to state capitols this month, budget woes range "from bad to ridiculously bad," said David Wyss, chief economist at Standard & Poors in New York. "There are some states, those hit particularly hard by the recession, that I don't think can cut spending enough. They're running out of things to cut."