Here is a list of state budget deficits:

1. Arizona – $1,200 million
2. California – $28,000 million
3. Connecticut – $302 million
4. Florida – $2,000 million
5. Kansas – $1,000 million
6. Kentucky – $294 million
7. Missouri –
8. New Hampshire – $372 million
9. New Jersey – $1,200 million
10. New York – $12,500 million ($47 billion in 2012)
11. Rhode Island – $372 million
12. South Carolina – $500 million
13. Utah – $272 million

Thats over $42 billion in state budget deficits in the next 18 months. Some states such as New York are facing up to $47 billion in deficits alone through 2012.
Forget GM, we need to begin bailing out state budgets who, due to their constitutions, must balance their budgets. This means either raising taxes or cutting services. This doesn’t even include the quasi-public organizations such as the MTA which is forecasting a $900 million budget shortfall. I don’t know what the policy ramifications are of bailing out states are, since the Federal government can’t buy up shares of state government like in the bank buyouts.