January 10, 2001

Dear Governor:

As Director of Finance, it is with pleasure that I submit to you the 2001-02 Governor’s Budget.

As with your prior budgets, this Budget’s primary focus is on improving the educational performance of students throughout California. The Budget again invests significant additional resources in educational programs designed to build on the successful reforms already instituted by your Administration. These resources are directed toward improving classroom instruction by lengthening the school year and initiating an effort to ensure that all teachers teach to the state’s high academic standards.

The Budget also provides resources to address California’s crucial energy supply issue, and includes significant initiatives in higher education, environmental protection, health care, and public safety, while providing for targeted tax relief and a prudent reserve.

I wish to express my great admiration for the staff of the Department of Finance and my thanks to their generous families. This Budget was months in the making. Through this process, their dedication and loyalty is unflagging. They are truly exemplary civil servants.

I look forward to working with you to make 2001 another year of significant accomplishment.

Sincerely,

B. TIMOTHY GAGE

Director