Highlights & Analysis of the Governor's Budget

Tuesday, November 16, 2010

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Executive Summary

The 2010-11 Budget Act appropriates $216 billion ($86.6 billion General Fund plus $31 billion Special Funds, $8 billion Bond Funds, and $91 billion Federal Funds) to support state and local programs (see Expenditures section Page 6). The $86.6 billion of General Fund spending is essentially flat relative to the prior (2009-10) fiscal year $86.3 billion level, although “underlying” General Fund spending, which recognizes federal fund offsets, deferrals, and fund shifts, to support General Fund programs is significantly higher (in excess of $95 billion for both the current and prior budget years).

This budget reflects $19.3 billion in budget solutions, including about $7.8 billion of expenditure reductions relative to current law spending levels, imposes no broad tax increases, and provides for a General Fund reserve of $1.3 billion. By contrast, the Democrat alternative budget included over $4.5 billion of tax increases in order to fund unsustainable state spending levels for yet another fiscal year. Overall, General Fund expenditures in this budget are about $4.2 billion less than the Democrats' Conference Committee plan.

Relative to the Governor’s May Revision the solutions in this budget lean more heavily on anticipated federal funds ($2 billion higher) and additional revenues ($2.4 billion higher) from the tax policy changes and the higher Legislative Analysts’ Office (LAO) revenue estimate (see Revenues section Page 7). Commensurately, the expenditure reductions are lower by about $4.4 billion.

Read complete analysis (pdf)