State budgets still face considerable challenges, including the need to tackle pension problems, while they have yet to experience a robust recovery three years after the recession officially ended, according to a new report by the National Conference of State Legislatures. The 39-page report, “State Budget Update: Summer 2012,” was released Tuesday. It provides an overview of the current status of budgets in all 50 states and the District of Columbia. An air of uncertainty hangs over many economic outlooks for states’ new fiscal years, most of which began on July 1. Revenue performance is improving and beginning to return to pre-recession levels. Additionally, budget gaps are rare and confined to a few states. States are projected to hold year-end balances at or above 5% for fiscal 2012 and 2013 — the level rating agencies typically recommend.