The purpose of this paper is to describe the current fiscal picture of education in California and provide insight into the issues facing policymakers as they attempt to resolve the complex and difficult budgetary issues facing this state. The paper is divided into four sections. The first describes the current fiscal issues in California school finance. It includes a brief historical perspective to help set the context and describe the interactions of the political and economic factors that impact the current discussions about California school finance. The second section offers a perspective on the future of educational finance in California, focusing on demographic and revenue trends. This section describes the structural deficit currently facing the state and how it will affect available resources for education for the remainder of the 1990s. The third section offers a brief perspective on a number of related and important issues facing policymakers as they deal with the issues outlined in sections 1 and 2. Finally, the last section of this paper offers some conclusions and policy recommendations regarding the allocation and distribution of public resources to education in California. (RR)