Rethinking California's Reserve Policy

Apr 10, 2025 - Eliminate Complex Fiscal Emergency Rules. Under current law, the Legislature may only withdraw reserves if the Governor declares a budget emergency, which can be triggered by either a disaster or a fiscal emergency.
https://lao.ca.gov/Publications/Report/5028

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - While addressing a deficit of $68  billion will be challenging, the Legislature has a number of options available to do so. In this section, we describe some of the key ones. (Some of the solutions here assume a budget emergency is declared.)
https://lao.ca.gov/Publications/Report/4819

The 2021-22 California Spending Plan: The State Appropriations Limit

Aug 30, 2021 - While, under these estimates, appropriations subject to the limit do exceed the limit across 2019 ‑20 and 2020 ‑21, under the administration ’s interpretation of the SAL, excess revenues do not occur until the first year of “negative room ” and the immediately proceeding fiscal year.
https://lao.ca.gov/Publications/Report/4449

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - Although the Governor has not officially d eclared a budget emergency for 2024-25 (or any other year in the budget window), we agree that the conditions for a declaration exist. After a budget emergency is declared, the state can withdraw up to half of the constitutional balance of the BSA.
https://lao.ca.gov/Publications/Report/4902

The 2024-25 Budget: Overview of the Governor's Budget

Jan 13, 2024 - Although the Governor has not officially d eclared a budget emergency for 2024 ‑25 (or any other year in the budget window), we agree that the conditions for a declaration exist. After a budget emergency is declared, the state can withdraw up to half of the constitutional balance of the BSA.
https://lao.ca.gov/Publications/Report/4825

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - Withdrawals Permitted in the Event of a Budget Emergency. The Legislature can suspend a BSA deposit or make a withdrawal from the mandatory share of the BSA if the Governor declares a budget emergency.
https://lao.ca.gov/Publications/Report/4418

The State Appropriations Limit

Apr 21, 2021 - As mentioned above, certain conditions must exist for state spending on an emergency to qualify as an exemption, which exist in these cases: Governor Declared Emergency. First,  to  qualify as an exemption, spending on emergencies must be made in response to a declared emergency by the Governor.
https://lao.ca.gov/Publications/Report/4416

COVID-19 and California’s Evolving Fiscal Outlook

Mar 18, 2020 - Although we do not know how the market will perform going forward, the recent price drops give us tangible information about one way in which COVID-19 could affect California’s budget. Prior to the COVID-19-related declines, equity markets had outperformed Department of Finance assumptions in December and January.
https://lao.ca.gov/Publications/Report/4203

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4762

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

Jan 13, 2025 - As such, if the Legislature wishes to have substantively more reserves available when responding to downturns or other emergencies, we would recommend also changing the formulas that set aside funds each year to increase how much is saved.
https://lao.ca.gov/Publications/Report/4951