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September 2004

California Spending Plan 2004-05

The Budget Act and Related Legislation


Chapter 1
The 2004-05 Budget—The Problem and The Solution

Background 1

Factors Behind 2004-05 Shortfall 1

The Budget Solution—Key Components 3

Budget Gap to Re-Emerge in 2005-06 5

Chapter 2
Key Features of the Budget Act and Related Legislation

The Budget Totals 7

Evolution of the Budget 11

State Appropriations Limit 16

Budget-Related Legislation 17

Chapter 3
Revenue-Related Provisions

Tax Amnesty 19

Tax Expenditure Programs 19

Tax Administration 21

Other Tax Matters 21

Chapter 4
Expenditure Highlights

Proposition 98 23

How a Proposition 98 Suspension Works 26

K-12 Proposition 98 27

Higher Education 31

CSU Plans to Serve About 11,000 Fewer Students 35

Local Government 36

Health 39

Social Services 46

Judiciary and Criminal Justice 54

Transportation 57

Resources and Environmental Protection 60

Capital Outlay 67

State Administration 68



The Legislative Analyst's Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the Legislature.

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