Description: Since 2020, California’s budget situation has been turbulent. Over the last six years, it has swung from a significant pandemic-era budget deficit that never materialized, to record-breaking surpluses, to large and persistent deficits. The state now faces an artificial intelligence (AI)-driven revenue surge that is masking—but not resolving—an underlying structural shortfall. In this post, we review this recent history of the state’s budget situation and assess where we are now.