The national recession and the financial market crunch have dragged down California's economy and state revenues. The 2009-10 Governor's Budget projects that the state would end 2009-10 with a $40 billion deficit if no corrective action were taken. In response, in February, the Legislature and the Governor agreed to a $42 billion package of solutions. Almost $6 billion of the package depends on voter approval at a May 19, 2009 special election.
While the Governor's Budget includes $11.5 billion in General Fund support for higher education in 2009-10; it also includes General Fund reductions to the three higher education segments in the current year. As a result, funded enrollment levels for 2008-09 and 2009-10 remain unclear and have created confusion about which enrollment actions the state supports. The Legislative Analyst's Office is proposing a re-benching of budgeted enrollment levels for 2009-10.