This report discusses state general fund budgets in fiscal year 1992, tax actions in 1992, and the budget outlook for FY 1993. State government's fiscal outlook is as clouded as the national economy's, and conspicuous improvement is not expected in FY 1993. Year-end balances are nearly nonexistent for most states and will not recover significantly in FY 1993. Also, legislators have avoided taxes far more successfully than in 1991; substantial budget cuts, a low rate of state expenditure growth, and major tax cuts in New Jersey and Pennsylvania held the net national tax increase to 1.4 percent of FY 1991 collections (down from 5.4 percent in 1991). Expenditures for the 40 reporting states will grow by 4.8 percent in FY 1993, continuing a long trend of reduced growth rates for state general fund budgets. At least 12 states made broad-based or across-the-board budget cuts to control spending growth in FY 1993. Aid to local governments, salary and benefit costs, and health care costs were targeted for cuts. State general revenue growth for FY 1992 was 4.2 percent above FY 1991 collections and projected at 7.1 percent for FY 1993. Of 47 reporting states, 24 enacted net tax increases for FY 1993, 7 reported net cuts, and 16 reported no change; total revenue increase was $5.1 billion. Additionally, Aid to Families with Dependent Children and Medicaid costs continued to grow, and most states experienced slow employment growth. State finances are at a very low point. (MLH)