The Sacramento Bee has a good interactive feature of how to balance California’s budget*. It puts all of the realistic proposals on the table (i.e., idiots who want California to stop giving out so much foreign aid, or some other hooey need not apply). What you’ll notice two things very quickly:
1) Most of the cuts are vicious and cruel.
2) The only way to get to a balanced budget is by increasing taxes.
Reality is a bitch.
*While I routinely argue that we shouldn’t worry about federal budget deficits, especially with underutilized human and industrial capacity, states do have to worry about deficits, since they can’t print their own currency.