Crude oil prices have fallen sharply since last summer, a bright spot for American consumers. Major oil-producing states aren’t as happy, because the loss in tax revenue is impacting budgets and economies. Some states will face real hardship; others will emerge relatively unscathed.

Every state faces challenges when it comes to balancing the books, but not every state is equally effective at tackling them. The responses of California and Illinois to post-2008 difficulties show how different the approaches can be—and how much is at stake.