The Government Accountability Office projects that the financial situation of state and local governments will continue to decline for at least the next 50 years. The hedge against long term deficits are balanced budget requirements in many states and localities but the projections do underscore the severity of the long-term fiscal pressures on government.
The main driver of fiscal pressure is declining tax receipts. Tax revenues fell nearly 5 percent from 2008 to 2009. In 2010, there was a slight rebound, but they're still below their 2008 level.