California Governor Gray Davis signed the 2002-03 Budget Act into law on September 5, 2002 -- some 67 days into the new fiscal year. The record-setting budget delay was caused by partisan differences in the legislature over how to close a budget deficit that grew from more than $12 billion in January 2002 to nearly $24 billion in May.

This issue brief describes how the budget gap was closed, summarizes the key provisions of the 2002-03 budget that impacted health programs, discusses their implications, and looks ahead to the future. The information presented in this issue brief is based on research and analysis conducted by the California Budget Project. This brief also summarizes information presented in several published sources, including budget summaries from the Legislative Analyst's Office and the Department of Finance.

A related issue brief examines the differences between the Governor's proposed budget and the Senate and Assembly proposals, and discusses the impacts of the proposed spending cuts on the state's health programs.