The Pew Charitable Trusts

In his 1982 State of the Union address, President Ronald Reagan called for sweeping changes in the partnership between Washington and the states. His proposal for a grand swap of state and federal responsibilities would have relieved states of one of the fastest-growing burdens on their budgets today. Congress never acted on Reagan's proposal, and his idea to fundamentally rethink the financial ties between states and the federal government went dormant. Perhaps until now.

New state laws that take effect across the country on New Year's Day range from affecting the way residents drive to whether they can marry or profit from snapping a celebrity's photograph. (See also:US: State lawmakers, lacking money, took up bad-behavior bans in '09 and US: New 2010 laws -- Cooking to texting)

It's going to be a long, hard climb out of the current economic downturn for many recession-ridden states hit hard by the housing crash, unemployment and shrinking revenues. But as the national economy starts its slow recovery, 11 states and the District of Columbia are showing signs of emerging from the recession, according to a new report.

State leaders warn that the recession may force fundamental changes in state government. Louisiana and Virginia prepare to lay off more than 1,100 state workers. And two months into the current fiscal year, Arizona and Connecticut pass budgets, leaving only Pennsylvania without a 2010 spending plan.