The fate of the stimulus monstrosity in the U.S. Senate properly commands our attention, but conservatives shouldn’t overlook some of the other important domestic-policy issues now being debated in Washington and in numerous state capitals. Recession-driven holes in state budgets are a common denominator in many of them.

• Many state politicians love the idea of expanding the State Children’s Health Insurance Program, along with the proposed increase in federal funding for Medicaid in the stimulus bill. They get to preside over a giveaway while not having to vote for higher taxes or debts to finance it. But there are good reasons to be critical of S-CHIP and Medicaid expansion. In addition to Michael Cannon’s excellent NRO piece yesterday, I would recommend a recent S-CHIP analysis by the Manhattan Institute’s Diana Furchtgott-Roth, an update on the Massachusetts health-care experiment from the Texas Public Policy Institute’s Arlene Wohlgemuth, and the Tax Foundation’s evisceration of the proposed cigarette-tax increase to pay for expanded government health insurance for kids. Gerald Prante and Joseph Henchman write that “a politically popular and expensive program should never be funded by a small, low-income, politically unpopular minority like cigarette smokers.”

• As states struggle to close deficits that in some cases exceed 20 percent of their projected budgets for next year, the Cato Institute’s Adam Schaeffer argues that school-choice mechanisms could not only expand educational opportunity but also alleviate fiscal pressure on states and localities:

A recent fiscal analysis of the Cato’s Institute’s broad-based education tax credit program demonstrates that it can save states billions of dollars. New York could save more than $6 billion over the first five years alone, while Illinois could save more than $3 billion and South Carolina more than $400 million. And even the small programs already up and running had saved taxpayers more than $444 million by 2006.

The savings arise because private school tuitions are, on average, significantly lower than average expenditures per public-school student. Structured correctly, tax-credit programs will save money by helping significant numbers of students to transfer to private schools of choice.

• Faced with major infrastructure needs, weak collections from existing highway taxes and fees, and uncertain prospects for future tax revenues, federal and state policymakers should embrace the idea of tolling interstates to finance needed improvements and maintenance, says Bob Poole of the Reason Foundation. Road pricing, carefully introduced and managed, would pave the way for phasing out the archaic gas tax in the future while conferring immediate benefits on commuters and truckers. Getting the details right is critical:

To win the support of truckers and other highway users, there would need to be strong federal conditions on such state-by-state conversions. It would need to be certain that tolling (and privatization, if a state opts to go that route) would be implemented only in connection with a major reconstruction and modernization of an Interstate corridor. And the toll revenues would have to be dedicated to the costs of rebuilding, operating, and maintaining that Interstate (including a reasonable return on investment), with any surplus revenues devoted 100% to other transportation (preferably highway) projects.

• Florida is seriously screwing up its insurance and coastal-development markets by trying to keep homeowners’ premiums artificially low. The Heartland Institute reports the unsurprising news that State Farm’s homeowners line is pulling out of the state altogether as a result. Market prices are signals of underlying realities, not arbritrary numbers that government officials can manipulate with impunity.