On November 12, 2003, over 70 policymakers, fiscal analysts, and academics gathered at the Federal Reserve Bank of Chicago to examine the fiscal condition of the state government sector. The conference was cosponsored by the Federal Reserve Bank of Chicago and the National Tax Association. Despite a shallow national recession that ended in November 2001, state budgets have continued to face three years of fiscal stress and conditions do not appear to be improving. Conference presenters from Michigan, Indiana, Illinois, Iowa, and Wisconsin noted that states' fiscal problems are being driven by structural conditions that will not be fully resolved by improving economic conditions. Difficult decisions about revisions to state revenue and expenditure systems remain ahead. (Contains 5 notes and 1 table.)