The recession may be officially over, but don’t tell that to Arkansas college students who won’t get scholarships, outdoor lovers in Arizona who will likely see parks shut, or thousands of state workers from Iowa to Washington who are about to lose their jobs.

For state governments nationwide, last year’s economic pain is hanging on like a vicious flu.

	Kansas Legislators spent a record 106-day session wrangling over how to fill a $700 million revenue shortfall in a $4.4 billion budget.In the end, faced with record deficits, a slumping economy and Gov. Bill Graves’ threat to slash education and social services, lawmakers earlier this month approved nearly $300 million in new taxes, most of which will take effect July 1. An increase in the state sales tax, fuel tax and cigarette tax were among the approved increases.

April tax returns failed to give a hoped-for boost, and now states are looking at the worst financial picture in possibly two decades. Few state leaders or budget analysts expect the picture to brighten for a year at best.

“States have really been slammed. I don’t know what other word to use,” said Scott Pattison at the National Association of State Budget Officers.

Medical costs continue to rise and unemployment is still demanding heavy state spending, while the past year of steadily weak tax revenues shows few signs of perking back up.

The latest reports show:

l States struggled with a total budget shortfall of $40 billion in the current fiscal year that ends, for all but four states, next month, according to the National Governors Assn.

l Medicaid costs rose 25 percent during the past two years, and now account for about $1 of every $6 state governments spend out of general funds.

l The fiscal year that begins for most states in July offers little relief, with 37 states expecting another painful gap between spending needs and incoming revenues, according to the National Conference of State Legislatures.

Tax plans fall short

Most legislatures are wrapping up their spending plans for the coming year, and all but a handful are dealing with a cash shortage as revenue estimates continue to drop.

Despite the fiscal fallout, calls for widespread tax increases have gone nowhere. Overwhelmingly, governors and lawmakers have turned to fee increases and targeted tax increases, such as cigarettes, while rejecting new sales or income taxes.

In California, facing a $23.6 billion shortfall over this year and next, Gov. Gray Davis turned to a combination of cigarette taxes and higher vehicle licensing fees to help cover the gap. The Democrat, who is seeking re-election, had earlier pledged he wouldn’t raise taxes.

Revenues continue to sag. January-March tax revenues, overall, fell by 8 percent compared to the year before, with corporate income taxes down a staggering 18 percent, according to preliminary data.

The April tax deadline gave scant relief. Higher-than-expected tax refunds, while nice for taxpayers, added to the drain on state coffers.

Different problems

Each state’s economic woes were slightly different: in Washington state, the dot-com fallout helped drive unemployment to the second-highest in the nation; in Hawaii and Florida, tourism soured badly after Sept. 11; New York suffered direct losses from the terrorist attacks.

In South Carolina, where one lawmaker described the past year’s free-falling economy as the worst in 40 years, leaders cut a whopping $502 million from this year’s budget, nearly 10 percent.

Most states sought to cushion the blows for top priorities like education, health care and law enforcement. But the first cuts came over a year ago, and the economy continued to worsen and then suffer in the aftermath of Sept. 11.

Now Medicaid and public education, both colleges and K-12, are up for reductions.