The Governor's proposed 2009-10 budget for California postsecondary education seeks to close a two-year deficit of nearly $42 billion. The budget proposes $17.4 billion in spending reductions for 2008-09 and 2009-10, and proposes $14.3 billion in new revenues through tax and fee increases. The budget also assumes $10 billion in external borrowing and internal fund transfers from January 2009 to June 2010. Combined State General plus local funding for higher education is expected to increase in 2009-10 from the revised, lowered funding levels in 2008-09. The proposed changes to higher education funding and policies could significantly reduce access to colleges and universities. The Commission realizes that economic circumstances will result in tough decisions. California must make a longer-term commitment of resources to reinvestment in higher education, one of the state's most important assets. This paper lists some broad principles the Commission believes should guide funding decisions.