The 1992-93 budget situation presented the Legislature and the Governor with a second consecutive year of massive budget funding gaps due to the ongoing economic problems in California and the nation. Last year, the Legislature resolved a 1991-92 budget funding gap of $14.3 billion through the enactment of $7.2 billion of tax increases, $3.4 billion of spending reductions, and $3.7 billion in other actions. At that time, both the Legislature and the administration anticipated that their actions would balance the state’s spending needs with its expected revenues not only in 1991-92, but for 1992-93 as well. That expectation, however, assumed that California’s economy would resume its growth in mid-1991. Instead, the recession continued to drag down state revenues while simultaneously boosting spending needs for various programs.