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 2020-21 Budget: California's Fiscal Outlook

Nov 20, 2019 - We find that the state now is in good shape to weather a recession typical of the post ‑World War II era. This shows the significant progress California has made in preparing for a downturn. It does not mean, however, that the state is prepared to weather any possible recession.
https://lao.ca.gov/Publications/Report/4111

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

Tempered Expectations

Dec 9, 2019 - First, the recession in our hypothetical “stress test ” is only average in severity and duration compared with the dozen recessions that have occurred since World War II. A more severe or longer lasting recession would inflict more fiscal strain on the state than what we assumed.
https://lao.ca.gov/Publications/Report/4122

Taking Stock of California’s Recession Readiness

Feb 12, 2020 - Our November 2019 Fiscal Outlook found the state was in good shape to weather a recession typical in severity to those of the post-World War II era. The state’s large budget reserves were important to our finding, but so too were its operating surpluses.
https://lao.ca.gov/Publications/Report/4156

The 2021-22 Budget: Overview of the Spending Plan (Final Version)

Oct 27, 2021 - Other Golden State Stimulus II. The budget includes $8. 1 b illion General Fund in Golden State Stimulus  II payments, the second round of state direct payments to lower ‑income taxpayers. Under the second round, the state will send payments to an estimated 14. 2 m illion taxpayers.
https://lao.ca.gov/Publications/Report/4448

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

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 2015-16 Budget: California Spending Plan

Oct 19, 2015 - The two federal programs are: (1) the Adult Education and Family Literacy Act, also known as Workforce Innovation and Opportunity Act (WIOA) Title II, and (2) the Carl D. Perkins Career and Technical Education Act (Perkins).
https://lao.ca.gov/Publications/Report/3302

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