The nation's 28 new governors assume office at what appears to be the bottom of the Great Recession, following budget shortfalls of $110 billion and $191 billion across 48 states in 2009 and 2010, respectively. They are beginning to dig out, but estimates from the Center on Budget and Policy Priorities suggest states face equally steep shortfalls in the next two years -- $160 billion in fiscal 2011 and another $140 billion in 2012.

Taking $600 billion out of state coffers in four years forces unprecedented scrutiny on how increasingly scarce taxpayer dollars are spent. The legislative monitoring firm State Net estimates that legislative hoppers will fill with 164,600 bills this session, including almost 9,500 carried over from 2010.

There is no single proven formula to making sense of the complexity of the issues or the mass of legislative proposals. That helps explain the cottage industry in the making of short lists of priorities and issues to watch during the session. Governing synthesized a number of them in the January issue (see "8 Issues to Watch in 2011").

For its part, the National Conference of State Legislatures bookended its Top 11 of 2011 list with balancing budgets in the lead position and infrastructure investments bringing up the rear. In between are what the organization calls "deep, controversial and painful" budget cuts that will inform policy choices around reforming state pensions and higher education, job creation, unemployment assistance and health-care reform. Add to the mix the complexity and potential distractions of redistricting and immigration.

John Thomasian, director of the National Governors Association Center for Best Practices, narrows his list to a single defining characteristic of the incoming class of governors, being "resigned to eliminating programs people want." He expects a year of "shedding and transferring" even valuable programs to balance budgets and protect a very short list of priorities.

There are proposals to close or privatize state prisons, printers and liquor stores, along with deep cuts to state subsidies for education, public transportation and health care for the poor. These are in addition to ongoing efforts to reduce the operating costs of government through agency consolidation and across-the-board cuts.

Despite the enormous problems facing states, short lists can help. On inauguration day 1997 in Washington state, then-Gov. Gary Locke (now U.S. Commerce secretary) had just been sworn in as the state’s 21st governor when his chief of staff faxed a short list of Locke’s priorities to all executive branch agencies. At the Department of Information Services -- where I served at the time -- the list was used as a catalyst for a quick, dirty but intense internal review of everything the agency did.

The central question was: How did the agency’s work fit with the governor’s priorities? It led to other questions: What was in the sweet spot, where our core mission, core competencies and greatest opportunity for growth intersected? What needed to be moved so we hit all three objectives, and how would we do that? It brought focus to the programs that were either mandated or could be justified by a legislative or federal requirement, and those things that were simply at risk. It also helped us hone our story and focused how we thought, spoke and wrote about the value of our agency's work in doing the public's business.

There were no consultants, coaches or forms to fill in. But it did bring the synergies between the governor’s priorities and the agency’s core competencies into bold relief. It did the same for its vulnerabilities. Moreover, it gave us lead time to realign, mitigate and make surgical cuts internally -- rather than always being subject to the blunt instrument of outside forces.

Granted, those were gentler times in many ways. That said, as the intensity and urgency about state government grows, it helps to have a short list of priorities to remember what really matters in these times of fiscal austerity.