State Budget Condition Publications

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Major Features of the 2007 California Budget

August 31, 2007 - On August 21, 2007, the Legislature passed the 2007-08 Budget Bill, along with implementing legislation. The Governor signed the budget on August 24, after using his line item veto authority to reduce General Fund appropriations by $703 million. The budget package authorizes total General Fund spending of $102.3 billion, essentially the same as revenues. Based on the 2007-08 budget plan’s policies, however, the state would once again face operating shortfalls of more than $5 billion in both 2008-09 and 2009-10. This is because many of the solutions enacted in the budget plan are of a one-time nature.


Supplemental Report of the 2007 Budget Act: 2007-08 Fiscal Year

August 29, 2007 - Statements of intent for requests for studies adopted by the Legislature as a supplement to the 2007 Budget Act.


The 2007-08 Budget Package (Revised)

July 24, 2007 - Summary of the 2007-08 budget package considered by the Legislature on July 20, 2007.


Webcast: Overview of the 2007-08 May Revision

May 15, 2007 - In this video, Elizabeth Hill Assesses the 2007-08 May Revision.


Overview of the 2007-08 May Revision

May 15, 2007 - The administration released its May Revision yesterday, identifying over $2 billion in new budget solutions to address a comparable level of increased budgetary problem. In this document, we provide our initial assessment of the problem definition and the viability of the administration’s proposed solutions.


California: Challenges and Opportunities

March 21, 2007 - Presented March 21, 2007, to the Pat Brown Institute of Public Affairs, California Agenda.


Webcast: Highlights from our 2007-08 Analysis of the Budget Bill

February 21, 2007 - Elizabeth Hill discusses highlights from our 2007-08 Analysis of the Budget Bill and Perspectives and Issues.


Analysis of the 2007-08 Budget Bill

February 21, 2007 - Our annual detailed examination of the Budget Bill based on the Governor's Budget. It includes hundreds of findings and recommendations related to education, health and social services, criminal justice, transportation, resources, capital outlay, information technology, and local government.


2007-08 Budget: Perspectives and Issues

February 21, 2007 - We estimate that the Governor’s budget plan would result in 2007-08 expenditures exceeding revenues by $2.6 billion. This would leave the state with a $726 million year-end deficit, compared to the Governor’s January 10th estimate of a $2.1 billion positive reserve. In addition, the state would face operating deficits of $3.4 billion in 2008-09, $2.5 billion in 2009-10, and $1.4 billion in 2010-11. Thus, additional solutions will be needed to bring the budget into balance, such as budgetary savings, enhanced resources, or reduced supplemental payments toward paying off budgetary debt. It will also be important to avoid raising ongoing budget commitments without identifying alternative reductions or new revenues to pay for them.


State Fiscal Picture 2007-08

February 21, 2007 - Based on our revenue and expenditure projections, we estimate that the adoption of the Governor’s budget plan would result in a $726 million deficit in 2007-08 (compared to the administration’s January 10th estimate of a $2.1 billion reserve). The difference in these numbers is due principally to our lower estimates of revenue in both the current and budget years, but also due to higher expenditure estimates, primarily related to Proposition 98. Adoption of the plan would also leave the state with large operating shortfalls in future years, unless additional corrective actions are taken. Thus, the Legislature will face major challenges in crafting a budget for the coming year. We believe that the primary focus should be on finding additional budget savings and/or revenues to address the near- and longer-term shortfalls. Should these solutions be insufficient to cover the full magnitude of the budget shortfall, however, the state can also achieve some near-term savings by reducing the amount of supplemental repayments on deficit-financing bonds relative to the $1.6 billion proposed in the budget.


Perspectives on the Economy and Demographics 2007-08

February 21, 2007 - For 2007, like most other economists at this time, we forecast that growth will continue but be modest for the nation and California. For the year as whole, 2007 growth will be somewhat less than it was in 2006, with the first half of the year the weakest. Throughout the year, however, growth should accelerate, as the housing sector stabilizes, especially in the second half of 2007. We expect that the state’s performance will generally be similar to the nation’s.


Major Expenditure Proposals in the 2007-08 Budget

February 21, 2007 - We discuss several of the most significant spending proposals in the budget. For more information on these spending proposals, and our findings and recommendations concerning them, please see our analysis of the appropriate department or program in the Analysis of the 2007-08 Budget Bill, available February 22st, 2007.


An Overview of State Expenditures 2007-08

February 21, 2007 - The Governor’s budget proposes total spending in 2007-08 of $130.8 billion, including $103.1 billion from the state’s General Fund and $27.7 billion from its special funds. This total budget-year spending is $4.2 billion higher than current-year spending—an increase of 3.3 percent. Of total budget-year spending, General Fund spending accounts for about 80 percent. This proposed spending level translates into $3,430 for every man, woman, and child in California, or $358 million per day.


Highlights of the 2007-08 Analysis and Perspectives and Issues

February 21, 2007 - This document summarizes and provides links to the major findings in the 2007-08 Analysis of the Budget Bill and Perspectives and Issues. (Video Summary)


Webcast: Elizabeth Hill Testimony on the Governor's Budget to the Assembly Budget Committee

January 31, 2007 - Elizabeth Hill testifies before the Assembly Budget Committee on the proposed Governor's Budget.

State Budget Condition Staff

Ann Hollingshead
(916) 319-8305
State Budget and Federal Funding
Carolyn Chu
(916) 319-8326
Chief Deputy Legislative Analyst