Officials in several states say they might withhold tax refunds for several months.
Hawaii, Alabama, North Carolina, Kansas, Idaho, and New York are planning to either withholding refunds or are considering doing so.
State officials claim budget shortfalls are forcing them to take drastic action.
"It's an indicator of how bad it is," said Scott Pattison, executive director of the National Association of State Budget Officers."You know things are bad when you have to do that."
New York, plagued with a $9 billion deficit, may delay 500 million in refunds. Meanwhile in Hawaii, residents might not see their refunds until the end of August.