The budget crisis confronting states is severe and will persist even as the economy rebounds. Most states have substantial shortfalls projected not just this year, but into the future, unless governors and legislators make fundamental changes to the budget. Public education, as the single largest category of all state and local government expenditures, has to be on the table for reductions. The good news is this process offers a great opportunity to consider meaningful education reforms that allow states to do more with less.

According to the Center on Budget and Policy Priorities, states are in the red for about $130 billion, or 20 percent of budgets in 46 states, for 2011 and 2012. State revenues shrank significantly during the recession and federal stimulus money that propped up state budgets is now drying up as well. States cannot responsibly put off making tough decisions about how to shrink government and bring their budgets back into balance.

Not all budget cuts have to be bad news though. The need to reduce spending on public education should stimulate a serious discussion of what works and what doesn’t in American education.

A review of the statistics shows that despite spending on public education growing steadily over the past century, America’s primary and secondary education achievements are mediocre. According to White House data, state-level spending on primary and secondary education totaled $235 billion in 2009/2010, while the latest PISA scores place the U.S. among average achievers. This international education survey, which assesses the knowledge and problem-solving abilities of 15-year-olds, shows that the U.S. is lagging far behind several Asian and European countries, all of which, besides Luxembourg, spend less on average per student on education.

The good news is that there are proven ways to reform education which can ease budget pressures while simultaneously raising student achievement.

Many private and charter schools outperform public schools in terms of both costs and performance. Vouchers’ dollar amounts are significantly lower than the amounts public schools spend per-student and yet voucher programs often achieve better results. A 2010 assessment of the D.C. Opportunity Scholarship Program showed that the 3,300 low-income D.C. children improved their academic achievement significantly under the program. The Milwaukee Parental Choice Program, which is the oldest voucher program in the nation, also bested Milwaukee public school graduation rates by 11 to 13 percent. The success of these programs provides a clue to the root problem of low achievement in so many urban areas: Poverty didn’t keep these children from performing better, failing schools did.

Furthermore, school choice can have a positive impact on public school reform. By introducing more competition for education dollars and students, school choice provides incentives to public schools to improve their academic performance. Studies show that when public schools find themselves in competition with private school vouchers and charter schools, public school student performance improves.

Increased school choice also means more parental empowerment. Empowering parents to choose the best schools for their children is the most promising step to reform America’s education system. When public schools are shielded from competition with better performing private and charter schools, school administrators can succumb to pressures from teachers’ unions rather than from parents who demand superior performance.

Worse, parents who have little say in how tax dollars flowing to public education are spent become discouraged from being actively involved in their children’s academic development. Education is most effective when the learning that takes place in schools and homes is mutually reinforcing. When both structures fail, it’s the children who are left in the dark.

Another important tool for cash-strapped states to get more education for their limited tax dollars is to embrace innovative approaches to education. Integrating information technology better inside and outside of the traditional classroom can result in significant cost-savings and performance-enhancements. Virtual education, for example, introduces online components into curricula, which makes education more child-centered and engaging to students.

Florida Virtual Schools (FLVS) achieved performance results as good as or better than state averages on any measure at a fraction of the costs. FLVS also represents a model system for tying funding directly to performance. The school only gets paid when students complete their courses with a passing grade.

Necessary state budget cuts could be a boon, rather than a burden, to education if state governors and legislators adopt meaningful education reforms by introducing more competition and school choice in their states.