As much as the states need some kind of good news, after what was done to the last "surplus" I still get nervous.

WASHINGTON, May 2 — States across the country are reporting stronger tax collections this spring for the first time in three years, fueling hopes that the bleakest budget-cutting days of the economic downturn are over, state officials and fiscal experts say.

From Florida to Oklahoma to Oregon, tax revenues are up in recent months from the same period last year, the first consistent increases many states have experienced since Wall Street's bubble burst in 2001.

…But most of those surpluses are small and a dark cloud remains: tax revenues are not growing fast enough to offset the rapidly rising costs of Medicaid, pensions and education, which account for most state spending.

As a result, 33 states faced projected revenue shortfalls in their 2005 budgets, and about 20 are still struggling to close them, the survey, released last week by the conference, said. Most states' fiscal years begin on July 1 or Oct. 1.

According to the survey, 30 states reported in March that personal income tax collections were at or above projections. In 36 states, sales taxes were coming in at levels as good as or better than forecast. And corporate income taxes were coming in on or above target in 37 states.

California has the worst budget problem by far, projecting a $15 billion gap in its 2005 budget. But for most states, the estimated shortfalls are significantly smaller than the yawning gaps they had to close in recent years, experts said.

"Yes, revenues are improving, but for almost all states, it is not enough," said Robert Kurtter, senior vice president for state ratings at Moody's Investors Service. "Fiscal '05 is continuing to be a difficult budget year."