Description: The Governor’s budget reflects major reductions to school spending in 2008-09 and 2009-10. In this report, we outline ways for the Legislature to achieve budget-ary savings while minimizing the adverse effects on core educational programs. In contrast to the Governor’s approach of cutting K-12 revenue limits (districts’ most flexible source of funding), we recommend that the Legislature make targeted spending reductions. We develop a three-tiered approach to making these reduc-tions, first identifying cuts that would have the least programmatic effect. To help districts respond to these reductions, the administration proposes to permanently suspend most categorical program requirements and all but three K-14 mandates. In contrast, we recommend that the Legislature adopt a more strategic approach that provides districts with additional categorical program flexibility but also simpli-fies, streamlines, and improves the existing system. We also recommend undertak-ing substantive mandate reform.