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Excerpt: In a dramatic coup d'etat last year, two maverick State Senate Democrats defected to the Republicans. They then switched back again, shifting a razor-thin majority to the highest bidder and bringing governmental dysfunction to the national headlines.

Unlike the federal government, state governments are constitutionally obligated to balance their budgets. From California to Maine, states are confronting, or avoiding, the fiscal impacts of the recession. New York State's legislature is in gridlock. Its revenue is disproportionately dependent on Wall Street. Faced with the painful necessity of cutting expenditures or raising taxes, legislators are burying their heads in the sand. Only governor Paterson has proposed major cutbacks, even reducing funds for education, but he has had little support from his legislative colleagues, all facing reelection campaigns this year.