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

Feb 20, 2026 - Our Revenue Estimates Consistent With $2.5  Billion Upgrade to Budget Bottom Line Compared to January. Our recent revenue post suggests an improvement in revenues of around $5 billion relative to the Governor’s budget estimates.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - First, the budget includes about ten budget solutions —proposals that create budget capacity, improving the budget ’s bottom line —and they total around $9  billion. Second, the Governor ’s budget includes about 60 discretionary spending proposals —proposals that use budget capacity, eroding the budget ’s bottom line —and these total about $600  million.
https://lao.ca.gov/Publications/Report/5101

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

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - The dark line shows the administration ’s forecast of revenues in the May Revision. The light green line shows the amount of revenue the state would need to “break even ” —that is, the level of revenue the state would need to be able to afford the level of spending proposed in the May Revision.
https://lao.ca.gov/Publications/Report/4907

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - All Other Changes Improve Budget Bottom Line by $2   Billion. Across the rest of the budget, the administration estimates a net improvement of $2  billion to the General Fund bottom line. The  largest component is a $1.5  billion upward revision to the entering fund balance, primarily driven by higher ‑than ‑expected reversions of unspent funds and lower required Proposition  2 (2014) debt payments.
https://lao.ca.gov/Publications/Report/5044

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

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - On a net basis, these items slightly improve the budget’s bottom line. Neither our November estimates nor the administration ’s estimates included any costs associated with the devastating wildfires in Southern California, as both were developed before those wildfires began.
https://lao.ca.gov/Publications/Report/4951

The 2018-19 May Revision: LAO Multiyear State Budget Outlook

May 17, 2018 - Because some major bargaining agreements expire early in the outlook period, these different assumptions have a significant effect on our bottom-line numbers. LAO Comments Uncertainties in the Longer-Term Outlook.
https://lao.ca.gov/Publications/Report/3843