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

Federal Spending in California

Jan 18, 2017 - While our estimate is not comparable with multi-state estimates, our approach does allow us to display spending amounts at a more detailed level and with more precision and detail than others. Figure 1 Comparing LAO Estimate of Federal Spending in California to Other Estimates Total Federal Expenditures in California (In Billions) LAO
https://lao.ca.gov/Publications/Report/3531/7

The 2019-20 May Revision: LAO Economic Outlook

May 12, 2019 - For example, stock markets unexpectedly dropped this week, perhaps in response to the escalating trade tensions between the US and China. Figure 1 LAO May 2019 Economic Growth Scenario Annual Percent Change Unless Indicated 2018
https://lao.ca.gov/Publications/Report/4036

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

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Three of those —the recession in the early 1990s, the dot ‑com bust in the early 2000s, and the Great Recession —resulted in large revenue shortfalls and ensuing multiyear deficits, even for some years after each recession ended.
https://lao.ca.gov/Publications/Report/4687

Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential

May 27, 2021 - What do the new multiyear estimates tell us? For one, they suggest the Governor ’s emphasis on one-time spending is appropriate. Of the large $38 billion discretionary surplus at the May Revision, we estimate that the Governor initially would allocate just $2 billion for new ongoing purposes.
https://lao.ca.gov/Publications/Report/4443

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - These analyses allow us to evaluate two key questions that come to mind in light of the current period of high inflation. First, what is the main channel through which high inflation affects the state’s budget condition?
https://lao.ca.gov/Publications/Report/4653

COVID-19 and California’s Evolving Fiscal Outlook

Mar 18, 2020 - Although we do not know how the market will perform going forward, the recent price drops give us tangible information about one way in which COVID-19 could affect California’s budget. Prior to the COVID-19-related declines, equity markets had outperformed Department of Finance assumptions in December and January.
https://lao.ca.gov/Publications/Report/4203

Amid Good Fiscal Times, Planning for the Future Is Crucial

May 21, 2019 - Although the multiyear fiscal outlook is useful for illustrating the budget trajectory under baseline conditions, consider how the following assumptions can cause us to overestimate future surpluses.
https://lao.ca.gov/Publications/Report/4051