While Washington is transfixed by the drama over the looming fiscal cliff, state officials across the country are bracing for the possibility of damaging economic ripple effects if President Obama and congressional leaders can’t negotiate a deal to block a huge rise in federal taxes and automatic spending cuts set to kick in by early January.
Many state officials had been counting on another good year of revenue growth and improving economic conditions after years of budget shortfalls throughout the Great Recession. But with parts of the East Coast devastated by Hurricane Sandy and the possibility of a year-end federal fiscal calamity, governors and state officials across the country are on high alert.
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