Don't cut local aide! See, that's easy.
Slightly harder part? Raise revenue. .3-.5% on the income tax should cover it, along with some sensible cuts and efficiencies. Heck, the Senate just came up with one.
Finally, to save money, don't wait to regulate health care. Do it now. Make a goal to put in place regulations that will save this state 10% on its health care premiums, even if that means limiting the health industry's profits, starting with the HMOs. That saves schools and saves wallets, money that will go right back into the economy to create jobs. Put some of the state's savings into UMASS Worcester to expand its size, as well as create scholarship opportunities. That will help shore up the shortage of doctors. There, we solved our structural deficit and improved health care at the same time.