New York Governor David Paterson
New York Governor David Paterson - 
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Bill Radke: New York governor David Paterson said this week he's withholding $750 million in payments to schools and local governments. That's because the state legislature could not come up with enough cuts to solve New York's budget shortfall. As Marketplace's Alisa Roth reports, just about every state is in similar trouble.

Alisa Roth: New York isn't the only one on an austerity program. States have been looking all over for places to cut their budgets.

Sue Urahn: Health and human services, programs to vulnerable populations, certainly some education funding, a lot of higher ed cuts in the last legislative session.

Sue Urahn is managing director of the Pew Center on the States. She says it'll probably get even worse next year, because last year, states had lots of stimulus money to help make up the difference.

Jon Shure works on the State Fiscal Project at the Center on Budget and Policy Priorities. It's a think-tank. He says it usually takes states longer to recover -- their revenue doesn't go back up until people start getting jobs again, and states have more expenses during a recession.

Jon Shure: In time of recession, public needs rise and the ability of states to meet those needs decline. So the gap between needs and resources is continuing to grow.

Both Shure and Urahn say it could be years before revenues get back to pre-recession levels. Something that could have long-term consequences.

In New York, I'm Alisa Roth for Marketplace.