Dec. 1 (Bloomberg) -- U.S. states’ budget shortfalls may be as much as $200 billion this year and next, Pennsylvania Governor Ed Rendell said, as officials press the federal government to boost construction spending and aid cash-strapped states.

A day before governors are set to meet with President-elect Barack Obama, Rendell, a Democrat who chairs the National Governors Association, said about $136 billion in construction projects are ready to begin if the federal government provides money under an economic stimulus plan.

States also need help with health-care, food-stamp and unemployment-insurance programs that swell during times of recession, Rendell told reporters in Washington.

“Without federal help, we’ll just have to make further cuts or raise taxes,” he said.

The National Bureau of Economic Research, a private, nonprofit group of economists based in Cambridge, Massachusetts, said today that the U.S. economy entered a recession a year ago. States are feeling the effects as rising unemployment and reduced consumer spending leave less money than needed for schools, roads and other programs.

Fiscal strains are expected to worsen next year as slipping capital gains from this year’s stock-market crash deal a blow to income-tax collections and more residents turn to states for Medicaid health benefits and other help.

Total Shortfalls

Thirty states are dealing with budget shortfalls totaling $30 billion for the current budget year, which ends in June for most states, on top of the cuts they made when they put their budgets together just months ago, according to the governors group and the National Conference of State Legislatures. Twenty- five states are forecasting shortfalls totaling $60 billion for the 2010 year, according to the groups.

Including the budget cuts made before the year began, the states are contending with budget shortfalls totaling $140 billion for the 2009 and 2010 budget years. Rendell said that number may grow as the year progresses.

“We believe it could go as high as $200 billion,” he said.

As a whole, states rely on sales and income taxes for about two-thirds of their revenue and, unlike the federal government, must balance their budgets. When the economy slows, states may raise taxes, put off public-works projects and stop hiring new employees.

“That can accelerate the downturn in the national economy,” said Joe Hackney, North Carolina’s speaker of the House and the president of the National Conference of State Legislatures.

Forecasts Cut

Over the past month, officials in states including Florida, California and Washington have cut forecasts for tax collections amid mounting evidence that Wall Street’s crisis was rippling through the economy. The economy shrank at a 0.5 percent rate during the third quarter and is expected to have contracted at four times that rate during the current three months, according to the median forecast of economists surveyed by Bloomberg.

Other governments have joined groups including the U.S. automobile industry in seeking help from the U.S. government. Philadelphia, Atlanta and Phoenix last month unsuccessfully sought some of the federal government’s $700 billion financial rescue package. Jefferson County, Alabama, struggling with soaring interest expense, has also sought help in refinancing $3 billion of costly, adjustable-rate bonds that have pushed it to the brink of bankruptcy.

The state officials who spoke in Washington today didn’t say precisely how much money they’re seeking. Vermont Governor Jim Douglas, the vice chairman of the governor’s group, said the assistance for Medicaid should be more than the $20 billion of aid the federal government gave during the last state fiscal crisis in 2003, given the expected length of the economic slump.

“This is a downturn that’s going to be with us, likely, for a couple of years,” he said.

To contact the reporter on this story: William Selway in San Francisco at wselway@bloomberg.net.

Last Updated: December 1, 2008 15:08 EST