State government shortfalls in fiscal years 2010 and 2011 are expected to reach $375 billion, says the Center on Budget and Policy Priorities.Among the worst hit: California, Illinois and New York, which expect to massively cut health care and education spending and lay off thousands of state workers to close respective shortfalls  of $12.3 billion, $13 billion and $9.2 billion.

What these shortfalls mean for the working classes of these states is a collapse in public services, attempts at the mass firing of state and municipal workers, the slaughter of pension and benefit standards and a battle even  for the survival of public sector unions, which today constitute the majority of the nation’s unionized workforce.  The fiscal crises of the states and who pays for the crisis is the terrain on which class struggle will be fought in the coming five years.