The outlook for the 1992-93 budget is dominated by the continued poor performance of the state and national economies. Even if recovery from the recession is now underway, as anticipated by the 1992-93 Governor’s Budget, state revenues will not be sufficient to both pay off the accumulated budget deficits and fund state services at current levels. Further delays in the timing of the state’s recovery will compound the problem faced by the Legislature in crafting a budget for 1992-93. The Governor’s Budget realistically addresses only a portion of the state’s budget problem. Although it would make some significant reductions in major state programs, it relies upon optimistic assumptions as to the availability of federal and other funds to bring the budget into balance, and does not offer an adequate reserve fund to protect the budget against unanticipated changes.