Over half of the 50 states are forecast to end the current fiscal year with more money than expected, thanks to fatter tax collections as the economy recovers. Several price indices point to stabilising house values, which should buoy up property-tax revenues and education budgets.
It may take time, though. State government payrolls rose by 1,000 in April, but local government employment dropped yet again, by 12,000. Government may soon contribute to recovery alongside the private sector.