Introduction
Budget Reform

The Governor's highest budget priority this year was to enact reforms in the state's budget system. In response, the Legislature approved an historic constitutional amendment, to be considered by the people on the next statewide ballot after this November.

Budget reform addresses the three major reasons that California has periodically faced drastic budget crises like the one we are experiencing this year:

  • Over the years, the state has undertaken ongoing commitments funded by temporary revenue surpluses during years of high growth. Budget reform will limit the Legislature's ability to spend surge revenue in high-growth years by mandating that at least three percent of General Fund revenues each year be sequestered into a "rainy day" fund, unless the rainy day fund is full or moneys are being accessed in a deficit year. Higher-than-anticipated revenues will also be captured and deposited in the fund.
  • The state has failed to build up a "rainy day" fund to cover downturns in the economy. Budget reform will greatly strengthen the state's rainy day fund by increasing it over the next several years to an amount equal to 12.5 percent of each year's General Fund revenues and strictly limiting the withdrawal of funds.
  • Finally, the state has been slow to act to reduce spending when budget deficits arise. Budget reform gives the Governor the ability to freeze and reduce spending mid-year in future downturns.
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CHAPTER HIGHLIGHTS for Introduction Back to Top

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 California State Lottery Modernization and Securitization
PRINTABLE BUDGET DOCUMENTS Back to Top
Enacted Budget Summary - Introduction (pdf * - 330K) -
Provides the entire Introduction Chapter in pdf format.