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 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - As such, the Governor ’s approach to the May Revision reflects the reality of the budget challenge before the Legislature. While the Governor focuses solutions in Medi-Cal —constituting $11  billion of the total $16  billion in solutions —the Legislature could pursue a different mix of spending and/or revenue solutions than those proposed.
https://lao.ca.gov/Publications/Report/5052

The 2017-18 Budget: California Spending Plan

Oct 18, 2017 - The AG was unable to hire all anticipated additional staff in 2016 ‑17, resulting in $4.5  million carried forward to 2017 ‑18. The 2017 ‑18 budget package also requires the AG to report quarterly on the status of its backlog of teacher misconduct reviews.
https://lao.ca.gov/Publications/Report/3694/3

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: 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

The 2022-23 Budget: State Appropriations Limit Implications

Mar 30, 2022 - However, none of these, even all together, would indefinitely forestall the long ‑term reality of the state ’s constitutional constraints. The reality is that state tax revenues are growing faster than the limit and the size of state government has reached the limit set by voters in the 1970s.
https://lao.ca.gov/Publications/Report/4583

LAO Multiyear State Budget Outlook

May 20, 2016 - In reality, the budget will be better or worse off than we estimate depending on future economic conditions and future state policy changes. Assume Current State Policies, Plus Governor ’s May Revision Proposals.
https://lao.ca.gov/Publications/Report/3472

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 2016-17 Budget: California Spending Plan

Oct 5, 2016 - Specifically, the budget assumed CTC would face higher ongoing costs for the Office of the Attorney General (AG) to review serious disciplinary cases. The AG was unable to hire all anticipated additional staff in 2015 –16 , resulting in $2.4  million in unspent current –year funds.
https://lao.ca.gov/Publications/Report/3487/3