Using creative methods to find cash is not new. During the last period of deficits, in 2001, some states raised money by securitizing their share of the large court settlements from tobacco companies. "The states took that money up front so they could close those budget deficits," Gelinas said.

Many governors have ruled out increasing taxes to cover the shortfalls, further limiting their options.

Spitzer, in his state of the state speech Wednesday in Albany, embraced the idea of imposing a ceiling on property taxes. In California, Schwarzenegger said, "I know that some people say that we should just raise taxes in order to fill the gap, but it would be wrong to raise taxes on people to cover Sacramento's overspending."

In New Jersey, Corzine said if the legislature does not enact his plan for toll increases, the alternatives are to increase the sales tax by 30 percent, the income tax by 20 percent, or the gas tax by 12 cents per gallon.

There is always an aversion to raising taxes during a recession.

The only other way for states to close the gap is by radically reducing spending, as Schwarzenegger is proposing in California. But according to some analysts, the states went through such a painful round of cuts during the 2001 slowdown that there is not much left to cut.

According to the Center on Budget and Policy Priorities, during the recession in 2001, about 34 states cut eligibility for public health programs, causing 1 million people to lose access to health care, and 34 states cut aid to school districts in 2004, meaning higher costs for textbooks, shorter school days and fewer staff members. States also raised tuition at public colleges and universities.

"In general, state expenditures are below, on average, where they were prior to the last recession," said Lav, the center's deputy director.