WASHINGTON (AP) — U.S. state governments face persistent financial challenges even as the improving economy has boosted tax revenue, a study says, highlighting the need for most states to reform their budgeting practices.

State budgets are being squeezed by rising pension and health care costs, federal spending cuts and overdue repairs and improvements to roads and bridges, the report says.

The study is the final report by the State Budget Crisis Task Force, a non-profit formed three years ago and co-chaired by former Federal Reserve Chairman Paul Volcker and former New York Lieutenant Governor Richard Ravitch.

The study recommends several steps: State governments should adopt more transparent budgeting practices; implement multiyear financial plans; beef up their oversight of local government budgets; and rebuild their reserve or “rainy day” funds.