The state’s strong revenue performance-a $7.5 billion increase since January-presents an extraordinary opportunity for the Legislature. Key decisions are: (1) how much of the increase should be provided to K-14 education, (2) should increased school funding be allocated to new initiatives or to strengthen existing programs and pay off debts, and (3) which state debt should be prepaid? We urge the Legislature to focus on regaining the state’s fiscal balance, particularly in light of the risks and uncertainties facing the state.