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Introduction
Reforming the Budget Process, the Budget Stabilization Act
The state's budget history shows that there are two shortcomings in the budget process that have led to recurring budget deficits. First, the state tends to spend all the money it takes in during years of high revenue growth or when it has a large available reserve. Thus, high-growth years lead to unsustainable levels of spending for the long run. Second, the state has not been able to slow spending growth fast enough to bring it back in line with a realistic projection of future revenues.
In order to address these two problems and restore the state to long-term balance, the Governor's Budget proposes the Budget Stabilization Act, a Constitutional Amendment to reform the state budget process. The reform would prevent over-budgeting based on extraordinary revenue gains and give the state the tools it needs to quickly reduce spending when necessary to avoid a deficit.
CHAPTER HIGHLIGHTS for
Introduction Back to Top
BUDGET OVERVIEW Back to Top
Budget-Balancing Reductions
In order to close the $14.5 billion budget gap, the proposed Governor's Budget includes 10-percent across-the-board reductions to all General Fund departments and programs, Boards, Commissions, and elected offices-including the legislative and judicial branches-except where such a reduction is in conflict with the state constitution or impractical. This statewide across-the-board reduction approach touches nearly every General Fund program in every department within each branch of state government. While these reductions present numerous challenges to implement, this across-the-board reduction approach is designed to protect essential services by spreading reductions as evenly as possible so that no single program is singled out for severe reductions. Reductions to General Fund budgets not under the control of the Administration are proposed as unallocated reductions. The unallocated General Fund reductions apply to the judicial and legislative branches of government and other entities such as the University of California and some very small executive branch entities.
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Introduction (pdf * - 231K)
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Provides this entire Introduction Chapter in pdf format.
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