Arizona

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Arizona

Rank: 1 (Previous Rank: 2*)
Budget gap (as a % of the total budget): 30.80%
Total gap: $3.1 billion
Gap before budget was approved: $1.9 billion
Additional midyear gap: $1.2 billion

Arizona was hit hard by the subprime crisis, and its economy has slowed sharply since mid-2006. Lawmakers, who had to make up a $2 billion budget shortfall for fiscal 2009, reduced the Medicaid rolls, put a freeze on hiring, and cut funding for community health centers and state universities.

Editor's note: Previous rank for all slides based on September 2008 data from Center on Budget & Policy Priorities that appeared in this Businessweek.com story on Oct. 3.