Lawmakers faced a projected collective budget gap of $36 billion this year as tax collections and other revenues failed to keep up with approved expenditures. That compares with a shortfall of $84 billion last year.

NCSL President Marty Stephens, Republican speaker of the Utah House, referred to the economic downturn that started in 2001 as a "marathon" race. "Though we've seen some improvement in fiscal conditions, there's still a long way to go before we cross the finish line."

The report released Tuesday at the group's annual meeting in Salt Lake City surveyed 44 states. Half of them reported they were forced to tap various reserved funds to pay the bills. About a third (15) cut spending, 10 drained their "rainy day" funds, and six took monies from their share of the settlement from a lawsuit against big tobacco. They also raised taxes and fees by a collective $3.5 billion.

Four states expended gambling activities. (Utah is one of only two states - the other is Hawaii - that ban all forms of gaming and lotteries.)

Seven states raised taxes by more than 1 percent, including three - Arkansas, New Jersey and Rhode Island - that hiked levies by more than 5 percent.

Iowa was alone among the reporting states in reducing taxes by more than 1 percent.

Utah lawmakers in January and February approved bills that will result in tax and fee increases topping $45 million. But with an $8 billion-plus budget, it was not counted among the seven states hiking taxes by more than 1 percent.