California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Because of how sensitive California ’s revenues are to stock market performance, the Governor ’s approach yields a revenue estimate that is $30  billion above that of our office. Regardless of the revenue assumption used in the 2026-27 budget, both our office and the Governor ’s Department of Finance (DOF) agree that the state faces large structural deficits.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: How to Use One-Time Revenue Improvements

Feb 20, 2026 - In addition, recent budgets have relied on nearly $30  billion in borrowing to address deficits, and the Governor ’s budget proposes almost $6  billion in additional borrowing (see Figure  1). A period of strong revenue growth is not an appropriate time to draw down significant reserves or continue to rely on borrowing.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - As such, the administration ’s revenue estimate exceeds ours by almost $30  billion across the budget window (2024 ‑25 through 2026 ‑27). This  higher revenue assumption substantially improves the budget condition relative to our forecast and is the main driving difference between our estimates of the deficit.
https://lao.ca.gov/Publications/Report/5101

Rethinking California's Reserve Policy

Apr 10, 2025 - Setting aside all capital gains revenues would increase the state ’s spending on both debt payments and reserve deposits before 2029 ‑30. After 2029 ‑30, the Legislature could choose to dedicate all of these requirements to reserves.
https://lao.ca.gov/Publications/Report/5028

Cal Facts: 2016

Dec 5, 2016 - About 30  percent of these costs were for retirement benefits (including pensions, Medicare, and Social Security) and health benefits (including vision and dental). Annual state costs to provide health benefits to retired state employees are not included in the above graphic.
https://lao.ca.gov/Publications/Report/3511/1

The 2023-24 Budget: Overview of the Spending Plan (Final Version)

Oct 16, 2023 - The budget package includes $2.7 billion in one time funds from various state and federal fund sources to support the following: (1) monthly rate supplement payments to providers based on region and number of enrolled children from January 1, 2024 through June 30, 2025; (2) a one-time provider lump-sum transitional payment; (3) a narrower definition of part-time care; (4) exten
https://lao.ca.gov/Publications/Report/4788

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

Apr 19, 2023 - Revenues increased by nearly 30 percent in 2020-21 and another 20 percent in 2021-22. In the course of allocating the historically large surpluses generated by the revenue surge, General Fund spending increased commensurately.
https://lao.ca.gov/Publications/Report/4762

The 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - For  example, to eliminate the operating deficit in 2024 ‑25, revenues would need to be roughly $30  billion higher than our forecast. Our analysis suggests that level of revenue is very unlikely —there is less than a one ‑in ‑six chance the state can afford the May Revision spending level across the five ‑year period.
https://lao.ca.gov/Publications/Report/4772

Hearing Concerning Propositions 30, 31, and 38 [Publication Details]

Sep 24, 2012 - Hearing Concerning Propositions 30, 31, and 38 [Publication Details] Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only.
https://lao.ca.gov/Publications/Detail/2658

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - As of June 30, 2025, $335.9  million exclusively from the General Fund had been allocated through the control sections by DOF for these purposes. After the special session, the sections were amended to allow funds to be used to reimburse local governments through June 2026 for (1)  unmet response and recovery costs, and (2)  lost property tax revenue.
https://lao.ca.gov/Publications/Report/5079