The 1996-97 Budget Act includes $1.6 billion for support of superior and municipal courts (referred to as the state's "trial courts") in' 1996-97 and assumes enactment of the Governor's proposal to consolidate and restructure the Trial Court Funding Program. The changes necessary to implement the Governor's proposal were included in AB 2553 (Isenberg), which failed passage in the Legislature. As a result of the failure of AB 2553, the Legislature will be under pressure-especially from trial courts and counties-to enact legislation early in the new legislative session to make technical adjustments to the budget act appropriation for the Trial Court Funding program. We discuss the current situation in this issue of California Update.