By Dennis Cauchon and Judy Keen
As a federal bailout takes shape, many states continue to spend money at boom-time rates even though revenue is sinking.
The mismatch between spending and revenue has left states facing projected shortfalls of up to $80 billion over the next six months, equal to as much as 10% of what states had planned to spend.
CASH-STRAPPED: States anxiously await federal funds
Forty-two state legislatures convene this month, and filling those gaps will be their top priority. A handful of states — notably California, Florida and New Jersey — have reduced spending, a USA TODAY review of state financial reports shows. Most have taken a wait-and-see attitude because spending cuts may not be needed if Congress approves a large federal aid package, and big spending hikes are a possibility.
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