California

Getty Images

California

Rank: 2 (Previous Rank: 1)
Budget gap (as a % of the total budget): 30.30%
Total gap: $30.6 billion
Gap before budget was approved: $22.2 billion
Additional midyear gap: $8.4 billion

The Golden State is looking a lot less golden these days as it is being forced to hold off on $3.8 billion in financing for road, prisons, school, and other projects because of the current budget shortfall. California, which has been battered by foreclosures, needs the money to pay for immediate needs, including health care and public safety. Democratic and Republican lawmakers have been unable to agree on a compromise. Governor Arnold Schwarzenegger supports new spending cuts and tax increases in addition to previously enacted cuts to the state's health insurance program for the poor and other social service programs.