The states' fiscal crisis is due to the country 's economic downturn and to changes in fiscal federalism that have exposed state fiscal systems to the impacts of federal policy making, economic developments and demographic changes to greater degrees than in the past. The states face growing long-term contradictions between escalating spending pressures and eroding tax bases over which stales have limited control. Short-term crisis-management, such as cutting spending, increasing taxes, accelerating tax collections, delaying bill payments, expanding gambling and using up reserves, are damaging, stopgap tactics. Long-term solutions will require more fundamental fiscal reform by both the federal government and the stales.