News from the National Governors Association summer meeting in Salt Lake City was decidedly grim. State governments, beneficiaries of stimulus dollars that sustained spending during the worst days of the recession, continue to face ongoing fiscal challenges. As the governors watch the debt and deficit debates in D.C., most acknowledge the end of federal assistance.

In the New York Times, Gov. Gregoire, outgoing NGA chair, summed it up the general sentiment.

“It’s like falling off a cliff,” said Gov. Christine Gregoire of Washington, a Democrat. “And we’re going to be at the bottom of that cliff for a long time in our relationship with the federal government. And whatever they’re going to decide in the way of cuts, I hope they understand the implications to the states and what it’s going to mean on the ground out here.”

Gregoire expresses deep regret for the policy decisions the recession forced on state government, from reducing higher education funding to deep cuts in human service programs.

For Wisconsin Gov. Scott Walker, who acted decisively to curtail compensation costs by pulling back on collective bargaining, the recession taught a different lesson. He tells the Washington Post:

Wisconsin Gov. Scott Walker’s (R) conclusions about the budget fight that prompted outrage in his state and drew national attention are no less personal than Gregoire’s, but far different in how he assesses what was done…

Walker says he did what was necessary, but should have handled it differently.

Walker said he came into office with the mindset of both a county executive and a small-business owner. “Identify a problem. Identify a solution. And you just do it,” he said. He set a fast pace in January with the legislature, without preparing the public. That might have worked in other settings, but it backfired on the new governor.

“We didn’t do enough of a job of making the case for what we were doing and why it was needed,” he said.

The Wisconsin experience was intensely partisan. Yet, governors generally claim to have achieved bipartisan successes. Politico reports on how the governors contrast their accomplishments with the partisan dysfunction unfolding slowly in the nation’s capital.

Yet, as the NYT reports, Republican and Democratic governors divide on how they want the debt/deficit crisis resolved. In part, the urgency depends on how deeply states have been affected by the erosion of stimulus dollars. We’re among the states most sharply affected, according to Stateline.org.

,,,the drop from the stimulus cliff was steeper for some states than others, according to a recent report by Federal Funds Information for States. Hardest hit was Hawaii, which saw a 16 percent drop in funding. Now, the feds are picking up about 52 percent of the state’s $1.3 billion Medicaid program.

The next-most adversely affected were Louisiana (13 percent), Washington State (13 percent), Alaska (12 percent) and Nevada (12 percent). The states with the smallest adjustments were Kentucky and Alabama, at 9 percent each. The variation is primarily due to a disproportionate share of stimulus money going to states with big increases in their unemployment rates.

Hard times indeed.