The first year of our biennium budget closed on June 30 with over $800M left in GRF. We avoided a deficit through mid-year budget cuts, one-time funds, and delaying payment for 2008 expenses until July 1 (to use SFY09 funds). Both revenues and expenditures came in below original estimates. All major tax sources came in below estimate even though the estimates had already taken into consideration the effects of the 2005 tax reforms. The biggest shortfalls occurred in the second half of the fiscal year. Tax receipts came in below SFY07 levels while expenditures increased, indicating a growing structural deficit. Although we start SFY09 with challenges, the entire $1.1B rainy day fund remains available as a resource, economists expect the national economy to start picking up the second half of the fiscal year, we have an economic stimulus package with promising investments, and local governments can now expect to receive $150M to deal with the foreclosure crisis, which has been a major reason for our sluggish economy. Read more at SFY08 Summary.