EXECUTIVE ORDER S-08-10


WHEREAS in January 2010, California’s projected budget gap for fiscal year 2010-11 was $19.9 billion; and
 
WHEREAS I declared a fiscal emergency and called upon the Legislature to adopt $8.9 billion in budget solutions in the Special Session, with the expectation that the September 30, 2010 General Fund transfer to the Budget Stabilization Account required by Section 20(b)(3) of Article XVI of the Constitution of the State of California would be suspended; and
 
WHEREAS the solutions adopted in the Special Session, combined with additional federal funds and administrative actions reduced the size of the problem by $2.1 billion; however, lower revenue estimates, federal law, court decisions, population and caseload growth, as well as the need for a prudent reserve, increased the size of the problem by $1.3 billion; and
 
WHEREAS while there continue to be signs that the national and California economies are slowly improving, California continues to confront serious budgetary problems; and
 
WHEREAS as reported in the May Revision to the Governor's Budget for Fiscal Year 2010-11, the Department of Finance now estimates the remaining budget shortfall for Fiscal Year 2010-11 will be approximately $19.1 billion unless further solutions are authorized by the Legislature; and
 
WHEREAS Section 20(b)(3) of Article XVI of the Constitution of the State of California requires the Controller, no later than September 30, 2010, to transfer a sum equal to 3 percent of the estimated amount of General Fund revenues for the current fiscal year to the Budget Stabilization Account; and
 
WHEREAS the transfer required by Section 20(b)(3) of Article XVI of the Constitution of the State of California to be made on September 30, 2010, is estimated to be approximately $2.744 billion; and
 
WHEREAS Section 20(e) of Article XVI of the Constitution of the State of California provides that any transfer from the General Fund to the Budget Stabilization Account may be suspended by an executive order issued no later than June 1, 2010; and
 
WHEREAS the purposes of the transfer are to establish a reserve available to the Legislature for transfer to the General Fund upon a majority vote and a sinking fund subaccount for the purpose of retiring outstanding Economic Recovery Bonds; and
 
WHEREAS the suspension of the transfer is necessary to alleviate the need for additional program cuts given the unprecedented budget deficit and will not reduce the regularly scheduled payments of the Economic Recovery Bonds.
 
NOW, THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, in accordance with Section 20(e) of Article XVI of the Constitution of the State of California, HEREBY ORDER the suspension of the September 30, 2010, transfer from the General Fund to the Budget Stabilization Account for the purpose of alleviating the need for additional program cuts to address the unprecedented budget deficit.