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The non-partisan Center on Budget and Policy Priorities released a report in October detailing how Federal policies have impacted the states: Federal Policies Contribute to the Severity of the State Fiscal Crisis, 10/17/03

Here's a summary:

* Tax cuts have reduced state revenues

* Growth of Internet and catalog sales have deprived states of sales tax revenues

* Unfunded mandates such as homeland security, election reform, education of disabled children, and No Child Left Behind have imposed requirements on states without the funds needed to meet those requirements

* Shifts from Medicare (paid by the Feds) to Medicaid (43% paid by the states)

As you can see, some of this is a result of federal policy, while some of it is a result of a failure to enact policy in response to changes in society.

At the same time, analysis of state spending shows that spending increases were at historical lows, with spending increases higher during the Reagan/Bush, Kennedy/Johnson, and Truman/Eisenhower years.

State policies of cutting taxes in the last ten years have also contributed to the problem.