Much of what a state gov't does is mandated by the Federal Govt, either by legislation or by court decisions.  

Sadly, the Feds just cut their money stream.  That caused the Texas money woes, just like it has caused Michigan's 2011 woes, and woes to most other states (and all to the tune of about 30% of the respective budgets). That means that we are stuck with paying for things with not enough money to pay for them.

Guess what?  Either we ignore Federal mandates (guess that's okay if you're talking about smoking weed?), or we suddenly figure out how to do it cheaper, or we raise taxes.