With California a fiscal basket case, Governor Arnold Schwarzenegger recently unveiled a draconian 2010-2011 budget for his state. He hopes to close a shortfall of nearly $20 billion through $6.9 billion in federal funds and $8.5 billion in budget cuts. On the chopping block are state aid to public transportation, schools, services for immigrants, in-home care and prisoner health care. Plus more than 200,000 children will no longer be eligible for health insurance.

Part of the problem is that prison spending is too costly, unsustainable, and indefensible. In California, prisons eat up over 10 percent of the state budget, while the state’s public universities are only 7 percent. And California spends $18,000 more per prisoner than the ten largest states, according to the Governor’s office.

Schwarzenegger recently proposed changing the state constitution so that no less than 10 percent of the budget would be allocated for higher education, and no more than 7 percent would be spent on prisons. California has the right idea when it comes to ending its prison boom and investing more in its future. But other states should follow suit as well.

“Spending 45 percent more on prisons than universities is no way to proceed into the future,” Schwarzenegger said in his January 6 State of the State speech. “What does it say about a state that focuses more on prison uniforms than caps and gowns? It simply is not healthy. I will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education.”

For the Golden State— the largest economy in America, crippled by high unemployment and the housing crisis—harsh fiscal realities are forcing lawmakers to seriously question the ways in which taxpayer funds are allocated. In many ways, California’s prison problem is a profoundly American story, the culmination of years of misplaced priorities and failed policies.

Politicians, eager to please voters with a tough-on-crime stance, passed draconian laws that were popular yet made no sense. These unfair laws—with catchy names such as “Three Strikes”— led to a swelling of the prison population, with more people behind bars and with longer sentences. Special interest groups such as the powerful California Correctional Peace Officers Association (CCPOA) have donated millions of dollars to political campaigns and successfully lobbied for stiff drug laws and longer prison terms. Prison overcrowding has become such a problem that a federal court found the conditions unconstitutional, and ordered California to cut its prison population by as many as 55,000 inmates.

The poor, African Americans and Latinos have been disproportionately affected by the prison boom. Three-quarters of incarcerated men in California are of color.

Meanwhile, California’s students cannot afford to go to college. The state’s public university system has suffered from budget cuts and a recent 32 percent tuition hike, which has sparked student protests.

Throughout the country, state governments are faced with a cash shortage and expensive, burgeoning prison populations. Unfortunately, desperation often serves as a factory for bad ideas. For example, Arizona is considering privatizing its 40,000 inmate prison system, including its death row. And Pennsylvania has decided to ship 2,000 prisoners to cash-needy Michigan and Virginia in February to address overcrowding issues.

But ultimately, states cannot outsource, privatize or ship all of their problems away. The answer is to develop thoughtful and effective alternatives to incarceration, decriminalize nonviolent drug offenses, and broaden opportunities for educational and economic advancement. And Black and Latino youth should have a future filled with something better than prison bars. Spending more on prisons than colleges is a recipe for disaster.