State budget quandaries: any heroes out there?(Commentary)

The pedals have hit the metal. The states have performed virtually all the budget patchwork they can--accounting gimmicks, higher fees, reduced services, trimmed payrolls, tapping tobacco settlement money, resorting to bonds to maintain roads.

Now the mega-choices are all that's left.

States can borrow, charging today's spending to tomorrow's taxpayers. Arnold Schwarzenegger, with his $15 billion bond measure, is suddenly the poster child for state borrowing. Other state leaders are clearly tempted, stretching their constitutions toward deficit spending dangerously akin to the seas of red ink currently tolerated by official Washington.

States can try to reinvent. To list, for example, the functions they consider critical, and budget only for those that top their lists. Democratic Gov. Gary Locke balanced Washington State's budget that way last year.

Or states can raise taxes, and reform tax systems. Politically, it's a perilous course. Alabama's Republican Gov. Bob Riley tried with a massive tax reform and education support package, which lost big time in a statewide referendum last September.

Virginia's Democratic Gov. Mark Warner is trying right now, with the most comprehensive tax proposal in play nationally. Warner advocates lower taxes on food and the first $20,000 in peoples' incomes, higher taxes for the affluent, a penny sales tax hike for everyone, a big jump in the cigarette tax, and closing loopholes in corporate taxes.

If Warner's package passes, Virginia will have $2.4 billion more to invest in seriously lagging school aid, higher education budgets, and transportation. Many businesses are in favor, buying Warner's argument that a high technology, 21st century economy requires high education levels and quality infrastructure.