As the bursting bubble or leaking balloon or whatever colorful characterization you want to use to describe the slowing housing market cycles through the economy, the effect is being more fully realized.

For many state treasuries, it's not good news.

A front-page story in today's New York Times announces, Housing Slump Pinches States in Pocketbook.

States, especially those where housing prices soared in recent years, are seeing their collections slow, especially in the sales and real estate transfer tax categories, according to the article. Florida has been the hardest hit.

Since the Sunshine State has no income tax, it depends on those property-related taxes. And given the recent drop in home values, the NYT story says the state's 2007 revenue is projected to drop for the first time since the energy crisis of the 1970s. And this is before Florida lawmakers possibly make changes that could lower even more the amount of property tax money the state collects.

Not surprisingly, according to the story, other states facing large treasury shortfalls include Arizona, California and Nevada, all places that, along with Florida, not so long ago benefited greatly from the housing boom.

Will the unwanted trickle down effect of slowed spending by homeowners who no longer have equity to tap, or worse, no longer have their homes at all, produce a broader economic slowdown? Former Fed Chief Alan Greenspan has said he sees a possible recession later this year. He's sure gotten talky since he left the rate-setting panel, hasn't he?

Others, however, including Florida officials, are more optimistic. They see the realigning real estate market as simply a cyclical adjustment. Their positive -- dare we say, mildly exuberant -- position is that the housing situation will soon work itself out, and state economies and treasuries will adjust just fine.

State tax filing help: If your state depends on income taxes, it probably wants your return (and money) by the 17th. You might be able to file it, possibly for free, electronically. Check out your state e-file options here.

You also can find additional info on your state's tax requirements here. At these pages, you'll find details on income taxes, as well as state sales and property taxes.

Bubbles photo courtesy of Scott Liddell via morgueFile.