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 2019-20 May Revision: Opportunity Zones

May 11, 2019 - We then compared the income growth of residents of zip codes that received investment to the income growth of residents in comparable zip codes that did not receive investment (using a statistical method known as difference in differences).
https://lao.ca.gov/Publications/Report/4038

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

An Extraordinary Moment in California's Fiscal History

Apr 11, 2019 - The administration would pay for CalEITC with the additional revenue that would result from conforming the state tax code to various federal tax code provisions. Again, while there are good arguments in favor of both proposals, apart from both affecting the state tax code, we see no inherent policy reason for why they should be linked.
https://lao.ca.gov/Publications/Report/4003

State Funding Actions Related to COVID-19

Apr 20, 2020 - Using authority established in Government Code 8690.6, the Governor transferred $1.3  billion from the Special Fund for Economic Uncertainties to a subaccount within the fund —the Disaster Response Emergency Operations Account (DREOA).
https://lao.ca.gov/Publications/Report/4223

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

The 2016-17 Budget: California Spending Plan

Oct 5, 2016 - Spending in the budget is color coded by program area. You can hover over each box and view a brief description about major state programs. Clicking a box will zoom into a view of a single program area.
https://lao.ca.gov/Publications/Report/3487/12

The Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - As such, Government Code Section 7914 defines qualified capital outlay as: “an appropriation for a fixed asset (including land and construction) with a useful life of 10 or more years and a value which equals or exceeds one hundred thousand dollars ($100,000). ” Because this statute is fairly broad, often there are questions about how it should be interpreted in certain cases.
https://lao.ca.gov/Publications/Report/4547