The NY Times has a great article today on some examples of sharp cuts by municipalities that have cut services to the bone. Most of these will have some long term economic consequences. I'd also add that this shows the foolishness of thinking of taxes solely in the form of what the government collects. Cut my bus service and you just raised my taxes by a car. Cut my streetlights and you raise my taxes by a shotgun. Add up all my exemptions and other complexities of the tax code and you just raised my taxes by an accountant.
We really do need to bail out the states. All that government waste just isn't materializing.