Introduction

The 2008 Budget Act resolves the $24.3 billion budget deficit identified in the May Revision. It provides a modest reserve of $1.7 billion this year, but projects a deficit of $1.0 billion in 2009-10. While this budget does not resolve the state's persistent structural budget deficit, it includes a historic budget reform measure that puts California on the path to fiscal stability and avoids borrowing from local governments or transportation funds.

Figure INT-01 shows that expenditure reductions account for 47 percent of all solutions, more than any other category. As a result of these reductions, this budget holds General Fund spending to virtually no growth this year--$103.4 billion in 2008-09 compared to $103.3 billion in 2007-08. It is also noteworthy that this reflects less than two-percent growth as compared to General Fund spending in 2006-07.
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The Budget includes a reduction of $850 million General Fund, or one percent below the amounts proposed in the budget bill adopted by the Legislature. This reduction is due to:

  • $510 million in General Fund vetoes. These vetoes reflect the Governor's determination to reduce spending to the maximum extent possible given constitutional, statutory, and court-ordered spending requirements.
  • $340 million in General Fund savings due to the delay in enacting this Budget and the effect of Executive Order S-09-08. The budget delay slowed or halted many activities of government for nearly three months. The Executive Order terminated the services of temporary employees and reduced overtime. Given the state's fiscal condition, the order will remain in effect for the remainder of the year.
Figure INT-02 displays the solutions included in this budget in more detail.
CHAPTER HIGHLIGHTS for Introduction Back to Top

 Budget Reform
 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.