On June 27, 2006, the Legislature passed the 2006-07 Budget Bill along with implementing legislation which authorizes total spending of $127.9 billion, of which $101.3 billion is from the General Fund and $26.6 billion is from special funds. The 2006-07 budget reflects a sharply improving fiscal picture, brought about by continued stronger-than-expected growth in General Fund revenues. Spending under the plan increases by over 9 percent between 2005-06 and 2006-07, reflecting significant program augmentations, budgetary debt prepayments, and rising caseloads and costs in state programs. Based on our current projections of revenues and expenditures under the 2006-07 Budget Act policies, the state would continue to face operating shortfalls in the range of $4.5 billion to $5 billion in 2007-08 and 2008-09.