July 25, 2008 10:09AM 

# State Budget Problems Can Be Solved, Without Cuts 

By [Adam B. Schaeffer](https://www.cato.org/people/adam-b-schaeffer) 

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Chris Edwards rightly [takes](../2008/07/24/state-budget-crisis/) the *Wall Street Journal* to task for its breathless [report](http://online.wsj.com/article/SB121682740001077489.html?mod=hpp_us_pageone&apl=y&r=977341) that “the stumbling U.S. economy is forcing states to slash spending and cut jobs in order to close a projected $40 billion shortfall in the current fiscal year.”

Like he says, smaller spending increases are “certainly no crisis after the orgy of budget expansion in recent years.”And Medicaid spending *is* dangerously out of control.

I’d only add that states are *[spending much more on k‑12 education](http://www.nasbo.org/Publications/PDFs/fy2006er.pdf)* than Medicaid. At 25 percent of all state-derived expenditures, it’s almost double Medicaid’s 13 percent share. State spending on k‑12 education dwarfs any other category.

And while cuts in government spending are a good thing, saving money with a huge expansion of freedom is even better.

*That’s why the best way solve state budget problems is something no one is yet considering; broad-based school choice.*

Here’s what the five states in our recent [fiscal analysis](https://www.cato.org/pub_display.php?pub_id=9515) of the [Public Education Tax Credit](https://www.cato.org/pub_display.php?pub_id=8812) stand to save if they do what’s right and greatly expand educational freedom:

Texas saves $15.9 billion in the first 10 years and $5.4 billion every year after the program has been in operation for 15 years.

**New York** saves $15.1 billion in the first 10 years and $4.8 billion every year after the program has been in operation for 15 years.

**Wisconsin** saves $9.3 billion in the first 10 years and $3.2 billion every year after the program has been in operation for 15 years.

**Illinois** saves $5.1 billion in the first 10 years and $1.6 billion every year after the program has been in operation for 15 years.

**South Carolina** saves $1.1 billion in the first 10 years and $350 million every year after the program has been in operation for 15 years.

##### Related Tags 

[Education](https://www.cato.org/education), [General](https://www.cato.org/general), [Tax and Budget Policy](https://www.cato.org/tax-budget-policy), [Center for Educational Freedom](https://www.cato.org/center-educational-freedom) 

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