New Jersey Governor Chris Christie will say next week how he'll pay for the first phase of a 10 percent income-tax cut for the second-wealthiest U.S. state's residents even as he deals with as much as $1.3 billion in higher costs for pensions and debt.

A provision in Gov. Andrew Cuomo's proposed budget amendments could greatly expand the power of state and local governments to borrow money with less independent oversight while potentially avoiding approval from voters or the Legislature, according to three state officials familiar with the proposal.

House Democrats are thinking of going into debt to help plug the big $1.5 billion hole in the state budget, a scheme that could eliminate the need for the Legislature's much-talked-about plan to go the voters for a tax increase.

An analysis of the state constitutional debt provisions in California, New Jersey and Hawaii, and the debt that these states face in spite of those provisions.

The California Public Employees' Retirement System, the largest public pension in the U.S. with $230 billion of assets, agreed last month to allow the state to delay making a $527 million payment until April to cover state worker benefits.

States should use the budget solutions of avoiding budget gimmicks and use any additional revenue to first eliminate all the dubious financial devices from budgets and to avoid state debt.

North Carolina should limit non-voter-approved debt. Any further borrowing by the state should be subject to voter approval. It should also reform state employee pensions by moving to more portable and flexible benefits, such as a 401(k). State government should set aside reserves to cover future health care costs for retired state employees. Health Savings Accounts would be one solution and will remain an option at least until 2018, when the state will need to meet federal health insurance regulations.