Budget & Economy Information

"In spite of a national recession, our economy has grown from the 7th largest to the 5th largest in the world," Governor Davis said in a TV ad that aired in October 2002. "But there's more to do - on our schools, our environment, our economy, and on energy."

So what has happened since?

A few weeks after he was re-elected to office, Governor Davis called a special session in the State Legislature to announce the state's budget hole was going to be larger than the $21 billion the Legislative Analyst's Office estimated just a few days prior. In December, he announced the budget deficit was as much as $35 billion. He has been criticized for not discussing the scope of the deficit during the gubernatorial campaign.

In his January budget plan, Davis proposed to raise taxes, including a 1% sales tax increase. He also proposed to make significant cuts to social programs, especially education and health care.

In his January State of the State Address, Davis said his "most immediate priority can be summed up as jobs, more jobs, and even more jobs." Later in January, he announced an economic development package to create jobs.

Davis presented a budget plan on May 14th, 2003 and announced a $38.2 billion deficit. Calling the new proposal a 'compromise', Davis delayed the structural reform he promised in his January 2003 State of the State Speech; proposed to temporarily raise the sales tax by half a cent; and proposed to borrow an estimated $11 billion to pay off over five years. In return, he softened cuts to education and other programs.

In June, the Davis administration tripled the vehicle license fee to address the $38 billion deficit.

Ending a four-week budget impasse, both the Senate and the Assembly approved a budget plan with no new taxes. On Saturday August 2nd, Gov. Davis signed the $99.1 billion budget. The plan includes cutting programs, borrowing billions of dollars, increasing fees, and deferring $7.9 billion to the next budget year.

In September Davis appointed Leon Panetta, President Clinton's budget chief, to head up an effort to solve the state's budget problems.

Gov. Davis also recently signed legislation reforming the worker's compensation system and cracking down on tax loopholes and tax shelters.

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Promise

"In spite of a national recession, our economy has grown from the 7th largest to the 5th largest in the world."
"But there's more to do - on our schools, our environment, our economy, and on energy."

Highlights

Since he was re-elected, Governor Davis has…

  • Announced an estimated $35 billion budget deficit in December, and a $38 billion deficit in May.
  • Said in his State of the State Address that his 'most immediate priority' is jobs.
  • Tripled the vehicle license fee in June.
  • Signed a 'compromise budget' on Aug. 2nd
  • Appointed President Clinton's budget chief to lead the effort to fix the budget.
  • Signed legislation reforming the state's workers' comp system.

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Promise

"I will do everything humanly possible not to cut one penny from public safety. If we can increase it, we will."

Highlights

Since he was re-elected, Governor Davis has…

  • Proposed an overall increase in prison funding in his budget plans.
  • Vetoed an early-release prison bill.
  • Proposed to preserve funding for local law enforcement programs in his May budget plan.
  • Signed a 'compromise budget' with some cuts to prisons and local law enforcement programs.
  • Signed gun safety legislation in September.

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Promise

"My fellow Californians, together we've increased education funding by 30% -- and student achievements scores are up three years in a row. But there's so much more to do."

Highlights

Since he was re-elected, Governor Davis has…

  • Proposed significant cuts to education in his January budget plan.
  • Approved nearly $2.6 billion in mid-year (2002-2003) cuts to education.
  • Reduced proposed January cuts and protected class-size reduction and accountability programs in his new May budget plan.
  • Signed a 'compromise budget' with cuts to education similar to those proposed in his May budget plan.
  • Announced in September $1.7 billion in bonds to upgrade overcrowded schools.

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Promise

"I believe we must continue protecting our coastline, our air, water."

Highlights

Since he was re-elected, Governor Davis has…

  • Signed a "polluter pays" bill increasing fees for air and water polluters.
  • Announced funding for coastal conservation and parkland improvement.
  • Proposed some reductions to environmental programs in his budget plans.
  • Signed a 'compromise budget' with additional cuts to environmental programs.
  • Signed coastal protection and air pollution bills.
  • Signed the electronic waste recycling bill.

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Promise

“I won’t be completely satisfied until every child in the state of California has access to quality, affordable health care.”

Highlights

Since he was re-elected, Governor Davis has…

  • Proposed to protect children's health care coverage in both budget plans.
  • Requested federal aid to insure more children statewide.
  • Approved cuts to the Healthy Families outreach program.
  • Proposed and approved cuts to Medi-Cal programs.
  • Signed a 'compromise budget': children's health care coverage was protected and proposed cuts to Medi-Cal were reduced.
  • Signed a landmark bill (SB2) that will require many businesses to provide health insurance to their employers.

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Promise

"...No governor ever spent as much money as we spent this year in real dollars, accounting for inflation, on transportation improvements. We will continue to do that for the next two to three years."

Highlights

Since he was re-elected, Governor Davis has…

  • Said in his State of the State Address that he "will direct his agencies to accelerate freeway and public transit projects by one year."
  • Proposed an estimated $1.5 billion in cuts to transportation.
  • Signed a 'compromise budget' with cuts to transportation.

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