Description: The 1993-94 Governor's Budget recognizes a decline in the state's fiscal fortunes for the fifth consecutive year. The continuing state recession has once again undermined the state's current-year spending plan, and will force the Legislature and the Administration into more painful choices as they struggle to balance the budget for the 1993-94 fiscal year. Even without attempting to provide for a prudent reserve, this task will require spending cuts or revenue increases conservatively estimated at $8.6 billion over the next 18 months. Given the magnitude of actions already taken in recent years, resolving this year's fiscal crisis requires a fundamental rethinking of governmental responsibilities in California. Here we assess the state's current fiscal outlook and evaluate the Governor's response to the situation. We also examine the implications of the 1994-95 outlook on possible budget strategies for 1993-94.