May 13, 2017 - On May 11, 2017 the Governor presented his 2017-18 May Revision budget proposal to the Legislature. We are releasing our assessment of the May Revision in various online products. This post describes the major features of the Governor’s May Revision and our office’s initial comments on it. Other posts in this series discuss our office’s independent assessments of the state’s economy, revenues, and spending proposals in the May Revision.
May 12, 2018 - On May 11, 2018 the Governor presented his 2018-19 May Revision budget proposal to the Legislature. This post describes the major features of the Governor’s May Revision and our office’s initial comments on it.
May 12, 2019 - The Governor’s revised budget package provides updates on the administration’s estimates of revenues (in part based on collections in April, the state’s most important revenue collection month). The Governor’s May Revision also revises some January budgetary proposals and introduces some new proposals. In this post, we provide a summary of the Governor’s revised budget, primarily focusing on the state’s General Fund—the budget’s main operating account.
Correction (5/14/19): Corrected sunset dates on certain Health and Human Services proposals.
May 15, 2017 - In this brief, we analyze the Governor’s May Revision education proposals. First, we review changes in the overall Proposition 98 funding level. Subsequently, we describe and assess the Governor’s major proposals for K‑12 education, child care and preschool, the California Community Colleges, the California State University, the University of California, and student financial aid.
5/16/17: Correction to LAO CalWORKs Stage 2 cost estimates.
October 2, 2018 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication discusses the 2018‑19 Budget Act and other major budget actions approved in 2018. This version reflects all budgetary legislation related to the 2018-19 Budget Act.
May 17, 2019 - This report presents our office’s independent assessment of the condition of the state General Fund budget through 2022-23 assuming the economy continues to grow and all of the Governor’s May Revision spending proposals are adopted.
January 13, 2020 - This report presents our office’s initial assessment of the Governor’s budget. We estimate the Governor had a $6 billion surplus to allocate to discretionary purposes in 2020-21. The Governor allocates most of the surplus toward one-time purposes, including maintaining a positive year-end balance in the state’s discretionary reserve. Under the administration’s estimates, total reserves would reach $20.5 billion at the end of 2020-21—this represents a $1.7 billion increase from the 2019-20 enacted level. California continues to enjoy a healthy fiscal situation. Despite its positive near-term picture, the budget’s multiyear outlook is subject to considerable uncertainty. In addition to describing the condition of the budget under the Governor’s proposal, this report discusses tools the Legislature can use to mitigate against these heightened risks.
January 20, 2020: Upon further review, one item included in the original version of Appendix Figure 3 on discretionary on health spending should not have been included (specfically, use of the Medi-Cal drug rebate fund to offset General Fund costs). Removing this item—which reduces General Fund spending—from the list of discretionary choices made in the Governor’s budget increases our calculation of the surplus to $6 billion. The document is updated to reflect these changes.
Update 1/24/20: Adjusted Judicial Branch items in Appendix Figure 1 to reflect ongoing spending.
October 27, 2021 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2021-22 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor.
January 13, 2017 - On January 10, 2017, the Governor presented his Proposition 98 budget package to the Legislature. In this post, we provide an overview and initial assessment of the package.
October 5, 2016 - Each year, the Legislative Analyst’s Office publishes the California Spending Plan to summarize the annual state budget. This publication discusses the 2016–17 Budget Act and other major budget actions approved during 2016. Unless indicated otherwise, figures and dollar amounts generally refer to budget actions passed as part of the June 2016 budget package, as signed into law on June 27 and July 1, 2016. In some cases, as noted, we discuss later budget actions approved during August 2016 by the Legislature. During August, for example, the Legislature and the Governor agreed to spend certain cap–and–trade funds. The budget totals include $400 million (General Fund) for affordable housing even though the Legislature and Governor have not reached agreement on this spending.
This year's California Spending Plan includes an interactive graphic to help the reader visualize how the state budget spent $167 billion in total state revenues.
May 16, 2022 - On May 13, 2022, Governor Newsom presented a revised state budget proposal to the Legislature. (This annual proposed revised budget is called the “May Revision.”) In this brief, we provide a summary of the Governor's revised budget, focusing on the overall condition and structure of the state General Fund—the budget's main operating account. In the coming days, we will analyze the plan in more detail and provide additional comments in hearing testimony and online. The information presented in this brief is based on our best understanding of the administration's proposals as of 11:00 AM, May 14, 2022. In many areas of the budget, this understanding will continue to evolve as we receive more information. We only plan to update this brief for very significant changes (that is, those greater than $500 million).
Update (5/20/22): Updated to reflect information about state appropriations limit (SAL) excluded spending and other budget proposals.
February 23, 2017 - Proposition 2 (2014) requires the state to make: (1) minimum annual payments toward certain eligible debts and (2) deposits into the state’s rainy day fund. This publication outlines alternatives to the Governor’s proposals that could free up General Fund resources. It also addresses whether the Legislature can access funds from state’s rainy day reserve under the measure’s budget emergency provisions.
January 13, 2022 - On January 10, 2022, Governor Newsom presented his proposed state budget to the Legislature. In this report, we provide a brief summary of the proposed budget based on our initial review. In the coming weeks, we will analyze the plan in more detail and release several additional budget analyses.
Update (1/21/22): Includes a corrected estimate of Governor’s Budget proposals that are excludable under the State Appropriations Limit (SAL).
May 15, 2016 - In the May Revision, the Governor proposes ending 2016-17 with $8.5 billion in total state General Fund reserves. This level of reserves is about $1.7 billion lower than the level proposed by the Governor in January, which largely reflects a downward revision in revenue estimates since then, as well as increased required spending on K-14 education. Nevertheless, estimated tax revenues continue to exceed proposed spending in 2016-17, which would facilitate total reserves ending 2016-17 at $4 billion above the level assumed in the state's 2015-16 budget plan. Since January, the state has made budgetary commitments that represent substantial new ongoing costs for the state. These include: (1) an increase in the statewide minimum wage, (2) augmentations for health and human service programs, and (3) increased costs associated with new collective bargaining agreements. These commitments, along with the lower estimates of revenues and reserves, mean there is now less capacity than there was in January for additional budgetary commitments. Given these developments, and at this point in a mature economic expansion, we think it would be prudent to pursue a target for total reserves that is at least as large as the $8.5 billion amount in the Governor’s revised budget.