State revenue forecasts have become progressively less reliable following each of the past three recessions. As capital gains become more unpredictable, tax revenue experts advise states to build larger rainy-day funds.
Mattoon, Richard, and Leslie McGranahan. "Revenue Bubbles and Structural Deficits: What's a State to Do?" Federal Reserve Bank of Chicago Working Paper No. 2008-15, July 2008.
"States' Revenue Estimating: Cracks in the Crystal Ball." The PEW Center on the States and The Nelson A. Rockefeller Institute of Government, March 2011.