(AXcess News) New York - Although the Great Recession is long over, it appears that austerity is here to stay for U.S. states, Standard & Poor's Ratings Services says in a report, "For U.S. State Budgets, Austerity Is Here To Stay," published today.

"Despite a steady pace of economic recovery for most states through the first two quarters of fiscal 2012, we believe that economic prospects and federal fiscal consolidation present significant uncertainty that could translate into continued budget austerity," the report says.

"Most governments have transitioned to a post-federal stimulus environment by making what we consider to be very difficult spending and revenue adjustments. This focus on budget alignment has translated to relative credit stability for the sector. But, in our view, fiscal conditions for the sector remain strained, and budget reserves are significantly depleted, which somewhat limits flexibility. The ability and willingness to adjust to economic volatility, revenue contraction, and potential funding or policy changes at the federal level will determine credit direction heading into fiscal 2013."

The report includes a discussion of each state's budget situation.

Source: Standard & Poor's