This report presents an analysis of the Governor's proposed State budget for fiscal year 1991-92. The analysis provides: (1) a discussion of major budget issues facing the Governor and the Legislature in constructing the 1991-92 State budget; (2) a brief overview of the Governor's proposed funding priorities; and (3) an analysis of the key policy issues facing higher education. These issues include student fees and financial aid, long-range planning for enrollment, community college reform, and the impact of the proposed budget on the State's Master Plan for Higher Education. The analysis also includes a summary of the findings and recommendations of the Legislative Analyst's report on the 1991-92 budget and postsecondary education proposals for capital outlay projects for the 1991-92 fiscal year. Appendices include specific data relevant to the Governor's budget such as summaries of actual budgets for recent years and proposed budgets for 1991-92 of California's segments and institutions of higher education, and student costs of attending the University of California and the California State University in comparison with similar public institutions within the United States. (GLR)