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 - In addition, the administration estimated the state would continue to face structural deficits between $15  billion and $25  billion through  2028 ‑29. 2026 ‑27 Budget Problem Now Larger Than Anticipated.
https://lao.ca.gov/Publications/Report/5091

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - As shown in Figure  1, our estimates are broadly consistent with those of the administration. Both our office and the Department of Finance (DOF) project operating deficits ranging from $10  billion to $20  billion over the multiyear period.
https://lao.ca.gov/Publications/Report/5052

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

May 17, 2025 - We define a delay as a proposal that reduces expenditures within the budget window (2023 ‑24 through 2025 ‑26) but shifts those costs to a future year in the multiyear period (2026 ‑27 through 2028 ‑29).
https://lao.ca.gov/Publications/Report/5044

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 2017-18 Budget: California Spending Plan

Oct 18, 2017 - Figure 29 State Penalty Fund (SPF) Program Expenditures for 2016 ‑17 and 2017 ‑18 ( In Thousands)
https://lao.ca.gov/Publications/Report/3694/11

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

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

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - Specifically, our November forecasted spending growth is about 6  percent over the multiyear period (2026-27 thought 2028-29) —a growth rate that is high by historical outlook standards and slightly above what we consider to be long-term revenue growth.
https://lao.ca.gov/Publications/Report/4983