Part One—State Fiscal Picture

• Overview of the Governor's Budget
• How General Fund Spending Is Allocated
• Key Programmatic Features
• Budget's Economic and Revenue Outlook
• The Economy
• State Revenues--Modest Underlying Growth
• Recent Developments Have Been Positive
• Governor's Budget Spending Proposals
• K-12 Education
• The LAO's Budget Outlook
• Current-Year and Budget-Year Outlooks
• Budget Remains in Balance in 2000-01
• Considerations for the Legislature
• Augmenting the Budgetary Reserve Should Be a Top Priority

Part Two—Economy and Demographics

• The Economic Outlook
• Recent Developments
• National Developments
• California's Economic Performance
• Asia--Recent Developments and Near-Term Outlook
• Export-Related Industries Have Suffered
• But Other Industries Have Fared Better
• Outlook For Asia Remains Important
• The Governor's Budget Economic Outlook
• The LAO's Economic Forecast
• National Forecast
• California Forecast
• Characteristics of California's Expansion Changing
• Outlook By Sector
• Real Estate Market to Remain Strong
• Key Risks to the Outlook
• Comparison of Recent Forecasts
• California's Demographic Outlook
• Population Growth Rate Increases
• In-Migration Helps Drive Population Growth
• Changes in California's Age Profile
• What Effects Will These Trends Have?

Part Three—State Revenues

• Background
• Revenue Performance Over Time
• Tax Relief Measures
• The Budget's General Fund Revenue Outlook
• Recent Trends Have Been Positive
• The LAO's General Fund Revenue Outlook
• The LAO's Forecast for Major Revenue Sources
• The Personal Income Tax
• Background
• PIT Liabilities Continue to Soar

• Capital Gains a Key Factor
• The Sales and Use Tax
• Background
• Sales and Use Tax Rates
• Taxable Sales Growth Stable in Recent Years
• Outlook--Continued Moderate Growth
• The Bank and Corporation Tax
• Earnings Have Slowed Recently
• Outlook--Profits Growth to Slowly Improve After 1999
• Outlook for Other General Fund Revenue Sources
• The Budget Forecast for Special Funds Revenues

Part Four—State Expenditures

• An Overview of State Expenditures
• Proposed Current-Year and Budget-Year Spending
• General Fund Spending
• Special Funds Spending
• Spending from Federal Funds and Bond Proceeds
• Federal Funds
• Bond Proceeds
• State Spending--A Historical Perspective
• Spending Growth Rates Have Mirrored Economic Trends
• Special Funds Share of Spending Levels Off
• Proposed Spending by Program Area
• Program Support Growth and Trends over Time
• Education's Budget Share Is Proposed to Rise
• Health Programs Share Levels Off
• Social Services Share Declining
• Spending Trends Elsewhere in the Budget
• Budget Proposals That Require Legislative or Federal Action
  • Proposition 98--K-12
  • Proposal
  • Issues for Legislative Consideration
  • Higher Education
  • Proposal
  • Issues for Legislative Consideration
  • CalWORKs Program
  • Proposal
  • Issues for Legislative Consideration
  • Health Care Reforms
  • Proposal
  • Issues for Legislative Consideration
  • Medi-Cal
  • Proposal
  • Issues for Legislative Consideration
  • Capital Outlay
  • Proposal
  • Issues for Legislative Consideration
  • Corrections
  • Proposal
  • Issues for Legislative Consideration
  • Transportation
  • Proposal
  • Issues for Legislative Consideration
  • Resources
  • Proposal
  • Issues for Legislative Consideration
  • Employee Compensation
  • Proposal
  • Issues for Legislative Consideration

Part Five—Major Issues Facing the Legislature

• Overhauling the State's Infrastructure Planning and Financing Process
• Year-Round Operation In Higher Education
• Shifting Gears: Rethinking Property Tax Shift Relief
• Proposition 10: How Does It Work?
• CalWORKs Community Service