Introduction
Paying Down the Debt

In 2004-05 the state used the Economic Recovery Bonds (ERBs) authorized by the voters in Proposition 57 to refinance $11.3 billion of budgetary debt inherited from the prior administration. In addition to the ERB borrowing, as of the end of the 2004-05 budget year, the state owed $6.9 billion for other budgetary borrowing, such as debt to local governments for un-reimbursed mandate claims and borrowing from Proposition 42 and other special funds. Repaying the bonds and the other budgetary debt has been a high priority of the administration and the Legislature. Specifically, the Budget Act of 2005 repaid budgetary borrowing of $1.4 billion and the Budget Act of 2006 repaid $2.8 billion, including $472 million in pre-payments of the ERBs.

This budget proposes $1.6 billion in pre-payments of the ERBs and $88 million of other budgetary debt re-payments. This will bring the total amount set aside to repay the ERBs to $7.4 billion in just the four years since the bonds were first issued. As a result, we now project that the ERBs will be fully retired in August of 2009, which is 14 years ahead of schedule.
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CHAPTER HIGHLIGHTS for Introduction Back to Top

image of black pointing arrowPaying Down the Debt
 Protecting Priorities
 Reducing the Operating Deficit
 Budget Reform
 The California Strategic Growth Plan

BUDGET OVERVIEW Back to Top
Overview of General Fund Revenues and Expenditures
The Governor's Budget projects General Fund revenues will increase by 7.2 percent in 2007-08 compared to the revised 2006-07 revenue estimate, and General Fund expenditures to increase by only 1.0 percent compared to the revised 2006-07 expenditure estimate.

 Budget Summary Improvements
As part of the Administration's effort to improve the understanding and comparability of budget expenditure data, the 2007-08 Governor's Budget Summary will now follow a more traditional agency format. In the past, some content in the Governor's Budget Summary was arranged by major program areas rather than by agency. Budget expenditure data will be displayed in both a summary format and a new agency change table format. The change tables are intended to provide the reader a snapshot of proposed expenditure and position adjustments in each agency, why those changes are being proposed, and their dollar and position impact.
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Introduction (pdf * - 9K) -
Provides this entire Introduction Chapter in pdf format.