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 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

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

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

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 2017-18 Budget: Alternatives to the Governor’s Proposition 2 Proposals

Feb 23, 2017 - This publication outlines alternatives to the Governor ’s proposals that could free up General Fund resources. Of these options, there is the strongest argument for counting the repayment of weight fee loans toward Proposition  2 debt payment requirements.
https://lao.ca.gov/Publications/Report/3574

The 2018-19 Budget: California Spending Plan (Final Version)

Oct 2, 2018 - In particular, the final budget package reduces payments for deferred maintenance by $ 700  m illion —relative to the Governor ’s proposal —freeing up a like amount of funding. Correspondingly, the final budget package reflects higher General Fund spending for homeless grants and the universities, among others.
https://lao.ca.gov/Publications/Report/3870/2

The 2019-20 May Revision: Sales Tax Exemptions for Diapers and Menstrual Products

May 12, 2019 - Public schools Relatively high ‑poverty middle schools and high schools must provide free menstrual products. Human Services Eligibility criteria and grant amounts not adjusted for menstrual expenses.
https://lao.ca.gov/Publications/Report/4040

Cap-and-Trade Extension: Issues for Legislative Oversight

Dec 12, 2017 - In 2017, about 15   p ercent of allowances were given for free to certain businesses for industry assistance. Only those covered entities operating in industries CARB has assessed as being at risk for leakage receive free allowances for industry assistance.
https://lao.ca.gov/Publications/Report/3719