California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - After the dot-com bust and the Great Recession, it took four and five years, respectively, for revenues to recover. Incorporating revenue risk into the budget now, therefore, reflects prudence, not pessimism.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - For California, the dot ‑com era —when stocks rose and then fell precipitously in response to widespread adoption of the internet —offers the most salient example. The internet has proven to be a transformative technology and, yet, the stock market ’s initial reaction was clearly overly exuberant.
https://lao.ca.gov/Publications/Report/5091

Building Reserves to Prepare for a Recession

Mar 7, 2018 - By most measures, the recession of the early 1990s was more severe than the dot ‑com bust in the early 2000s. For example, unemployment in California reached 9. 7  p ercent in mid ‑ to late ‑1992, but peaked at 6. 9  p ercent after the dot ‑com bust.
https://lao.ca.gov/Publications/Report/3769

The 2026-27 Budget: Overview of the Governor's Budget

Jan 12, 2026 - The  Governor ’s budget also includes some proposals that provide savings in future years (that is, in 2027 ‑28 and after). This includes proposals to: (1)  remove the state ’s share of costs associated with growth in IHSS hours per case, which we estimate could save $650  million by 2029 ‑30 (if hours continue to grow at their current rates); (2)  make an ongoing reduction to
https://lao.ca.gov/Publications/Report/5101

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - This post presents our office ’s forecast of the condition of the state General Fund budget through 2027 ‑28 under our revenue estimates and assuming the Governor ’s May Revision policies are adopted.
https://lao.ca.gov/Publications/Report/4907

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Notably, this cost shift is intended to continue on an ongoing basis—meaning costs incurred in 2026‑27 would be recognized in 2027‑28, and so on. Undoing this maneuver in the future will require the state to pay for two years’ worth of program costs in a single fiscal year.
https://lao.ca.gov/Publications/Report/5079

The 2018-19 May Revision: LAO Economic Outlook

May 12, 2018 - The typical PE ratio since 1990 is 21 (19 if the dot-com bubble of the late 1990s and early 2000s is excluded). Similar to the price-to-earnings ratio, the home price-to-rent ratio is used to gauge if home prices are in line with underlying demand for housing.
https://lao.ca.gov/Publications/Report/3829

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - Other downturns, such as the 2001 so-called dot-com recession, had severe fiscal implications while inflicting somewhat milder economic damage. The 2008 Great Recession had brutal effects on both the state ’s economy and budget.
https://lao.ca.gov/Publications/Report/4762

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - In total, the spending plan maintains a total of $29  billion for these packages across a seven ‑year period (2021 ‑28), which represents 79  percent of the original multiyear planned amounts ($36  billion).
https://lao.ca.gov/Publications/Report/4922

Managing California’s Cash

Sep 3, 2019 - After a period of relative calm in the mid ‑ and late ‑1990s, California faced another series of years with acute budget problems following the dot ‑com bust and ensuing recession. Although the dot ‑com bust was relatively mild in economic terms, it hit the California budget —which is particularly reliant on the Bay Area ’s technology sector —especially hard.
https://lao.ca.gov/Publications/Report/4092