California's health care reform may be the first victim of the economic downturn. Governor Arnold Schwarzenegger's ambitious $14.9 billion plan to reform the state's health insurance system has crashed, in part because it was unclear proposed funding sources would raise enough revenue to ensure the program's viability in the face of a deteriorating budget environment. The state is facing a $14.5 billion deficit.    more »

Six months ago, states were predicting balanced budgets and surpluses. Virtually all had surpluses at the end of fiscal year 2007 and more than half had ending balances equaling at least 10 percent of their general funds. Governors and legislatures were happily talking about property tax relief and expanding medical coverage to the uninsured.   more »