California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Whereas California’s labor market has stagnated over the last two years, the S&P 500 stock index has appreciated roughly 50 percent over the same period. And most of this increase has come from skyrocketing share prices among a handful of firms associated with innovations in Artificial Intelligence (AI).
https://lao.ca.gov/Publications/Report/5104

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 - The stock market (S &P 500) has risen 50  percent in the last two years. Most of these gains come from the meteoric rise in the value of a handful of tech companies that investors believe will be major beneficiaries of recent advances in AI.
https://lao.ca.gov/Publications/Report/5091

The 2020-21 Budget: Overview of the California Spending Plan (Final Version)

Oct 5, 2020 - As a condition of receiving the funding, counties must show that they are in com pliance with state and federal public health requirements. Budget Provides $600   Million for Project Homekey and Related Services.
https://lao.ca.gov/Publications/Report/4263

The 2019-20 Budget: California's Fiscal Outlook

Nov 14, 2018 - As a result of the dot ‑com bust and ensuing recession in 2001, state revenues declined precipitously. The very next year, looking to budget year 2002 ‑03, our Fiscal Outlook found the state ’s surplus had disappeared, and instead, the budget faced a deficit of $12. 4  b illion for the upcoming year.
https://lao.ca.gov/Publications/Report/3896

The State Appropriations Limit

Apr 21, 2021 - The state ’s appropriations subject to the limit fell substantially during the dot ‑com bust in the early 2000s and again during the Great Recession due to the significant decline in state revenues during those downturns.
https://lao.ca.gov/Publications/Report/4416

The 2018-19 May Revision: LAO Economic Outlook

May 12, 2018 - Figure 1 Comparing Recent California Economic Scenarios Percent Change Unless Indicated Target federal funds rate (percent) 1.6 S &P 500 (annual average) 2,612 73 61 a An economic growth scenario based on Moody ’s Analytics ’ April 2018 U.S.
https://lao.ca.gov/Publications/Report/3829

The 2019-20 Budget: Proposition 98 Outlook

Nov 14, 2018 - The K ‑ 12 r ate is about $1, 000 p er student ( 9  p ercent) above the amount school districts were receiving in 2007 ‑ 08 p rior to the Great Recession. Similarly, the community college rate is about $1, 000 p er student ( 15  p ercent) above its inflation ‑adjusted 2007 ‑ 08 l evel.
https://lao.ca.gov/Publications/Report/3897

Managing California’s Cash

Sep 3, 2019 - After a period of relative calm in the mid ‑ and late ‑1990s, California faced another series of years with acute budget problems following the dot ‑com bust and ensuing recession. Although the dot ‑com bust was relatively mild in economic terms, it hit the California budget —which is particularly reliant on the Bay Area ’s technology sector —especially hard.
https://lao.ca.gov/Publications/Report/4092

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

Oct 2, 2018 - Most of the increase ($ 22  m illion) is attributable to the program receiving a 4. 3  p ercent COLA. The higher rate is in recognition that the program did not receive a COLA the past few years. Specifically, the 4. 3  p ercent equates to a 2. 7  p ercent COLA associated with 2018 ‑19 and a 1. 6  p ercent COLA associated with 2017 ‑18.
https://lao.ca.gov/Publications/Report/3870/3