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 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

Building Reserves to Prepare for a Recession

Mar 7, 2018 - Under Proposition  2, the state must put money into the BSA until its total reaches a maximum amount of 10  p ercent of General Fund tax revenue. Currently, this is about $13. 5  b illion. Once the BSA reaches this maximum, funds that would bring the BSA above 10  p ercent of General Fund taxes must be spent on infrastructure.
https://lao.ca.gov/Publications/Report/3769

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - This post presents our office ’s forecast of the condition of the state General Fund budget through 2027 ‑28 under our revenue estimates and assuming the Governor ’s May Revision policies are adopted.
https://lao.ca.gov/Publications/Report/4907

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

Jan 12, 2026 - In this report, we provide a high ‑level summary and our initial analysis of the Governor ’s budget based on our preliminary review (as of January 10). In the coming weeks, we will analyze the plan in more detail and release many additional issue ‑specific budget analyses.
https://lao.ca.gov/Publications/Report/5101

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Borrowing ($10 Billion) The budget package primarily addresses the budget problem using borrowing —these solutions represent $10  billion or roughly two ‑thirds of the total solutions. We define “borrowing ” as budget actions that achieve savings in the present, but result in an obligation or higher cost for the state in a future year.
https://lao.ca.gov/Publications/Report/5079

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

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 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - In total, the spending plan maintains a total of $29  billion for these packages across a seven ‑year period (2021 ‑28), which represents 79  percent of the original multiyear planned amounts ($36  billion).
https://lao.ca.gov/Publications/Report/4922

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