that we are unfortunately (in some states) going to need a combination of higher taxes to go along with reduced spending in order to plug these holes. I also agree that the first thing that needs to happen is to have a budget that is built around more reasonable economic assumptions in the first place (ie some average that includes both good times and bad).

Having said that, in many states, pensions aren’t a real problem, as they are a small part of the overall budget and can be “re-funded” by raising contribution rates or changing calculations going forward (Ohio is an excellent example here).