With the economy in a slide and the credit markets seized up, states are slashing budgets, eliminating jobs, putting major construction projects on hold and nervously waiting to see whether their shriveled pension funds recover.

They are also weighing lawsuits against Wall Street firms. And at least one state -- California -- may ask Washington to come to the rescue.

Gov. Arnold Schwarzenegger warned he may have to beg the federal government for a short-term loan to cover operating costs for schools, nursing homes and police if the nation's most populous state is unable to borrow a short-term $7 billion on the credit market.

In Massachusetts, Gov. Deval Patrick may ask state lawmakers for the power to make midyear cuts to close a $223 million budget gap. Massachusetts also saw its pension fund shrink by nearly $4 billion in September alone to about $46 billion.

States such as Massachusetts, Indiana, Washington, Pennsylvania and Colorado are either putting a freeze on hiring or hoping to reduce their payroll through attrition.

With tax revenue expected to fall at least $2.5 billion short of previous estimates, Virginia Gov. Tim Kaine ordered 570 layoffs, cut college funding by at least 5 percent and postponed state employee raises from next month until next summer.

Washington Gov. Chris Gregoire suspended the early stages of a program that would give employees paid family leave. In Utah, more than 19,000 people who received vision, physical therapy, speech therapy and other benefits from Medicaid will lose those services.

In some states, the fiscal woes have bubbled over into anger and threats of lawsuits.

West Virginia's governor has asked his staff to research possible legal action after the state suffered deep losses in pension funds with holdings in Wall Street players like AIG, Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch and Washington Mutual.

"I want somebody to pay," Gov. Joe Manchin said. "It's outrageous. We should be looking at the people who walked away with the money."