Updated: Highlights and Analysis of the 2009-10 Budget

Wednesday, September 23, 2009

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On February 20, 2009 the Governor signed the 2009-10 Budget Act and related budget measures that addressed the combined 2008-09 and 2009-10 “budget problem” of $39.5 billion General Fund. At that time it was clear that the budget plan would have to be revisited after the May Revision because of continued economic weakness and a variety of “budgetary risks.”

As anticipated since the February enactment of the 2009-10 Budget Act, the state budget has fallen back out of balance. The revised state General Fund revenue and expenditure forecasts indicate that a new budget gap of $23.1 billion has emerged (about $7.1 billion in 2008-09 and $16 billion for 2009-10). The revised 2009-10 Budget Act includes a combination of major spending reductions, some revenue increases, fund shifts and borrowing – but no new taxes – to make up the budgetary shortfall.

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