The state spending plan for 2006-07 includes total budget expenditures of $128.4 billion, sharply increasing funding for education, providing targeted increases in several other program areas, and prepaying nearly $3 billion in budgetary debt. The expanded commitments included in this spending plan are in striking contrast to the four previous years, when policymakers were faced with closing major budget shortfalls. Despite much stronger-than-expected revenues, 2006-07 expenditures exceed revenues, with the difference being covered by the drawdown of carryover reserves available from 2005-06. Based on our out-year estimates of revenues and expenditures, we estimate that this imbalance will continue in 2007-08 and 2008-09 absent corrective action, with annual operating shortfalls in the range of $4.5 billion and $5 billion projected for this period.
California's Fiscal Outlook: LAO Projections, 2006-07 Through 2011-12Report Feb 22, 2005
State Fiscal Picture 2005-06Report Nov 14, 2001
California's Fiscal Outlook: LAO Projections, 2001-02 Through 2006-07