In August, more than half the states were already facing severe financial problems that together amounted to a staggering $48 billion budget shortfall for 2009. The Center on Budget and Policy Priorities says the 29 states in trouble range from California — which is $22.2 billion in the hole, nearly a quarter of last year’s general fund — to Vermont, which is $59 million in the red. The spending disease afflicting Washington is rapidly spreading among state capitals coast-to-coast.

Most states are constitutionally prohibited from running deficits or borrowing money to cover operating expenditures, so public fficials now face a limited number of options: draw down “Rainy Day” reserves, cut spending or raise taxes. But even before the national economy tanked, politicians in many state capitals had been following Washington’s lead and spending tax money as fast as it was coming in. For example, Maryland’s budget more than doubled from $15 billion to $31.2 billion during the last 10 years. But even the state with the highest per-capita income in the nation is on the ropes after its decade-long spending spree, which expanded the size and scope of state government far beyond what was required by population increases or inflation.