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

Feb 20, 2026 - Although the state faces significant cost pressures due to reductions in federal funding, using one-time resources to backfill those ongoing reductions would put the state on even worse fiscal footing going forward.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - In this report, we offer an alternative approach for the Legislature to take that would put the state on better fiscal footing. Ultimately, this approach includes: adopting LAO revenue estimates, tackling the resulting budget problem, and shrinking multiyear deficits.
https://lao.ca.gov/Publications/Report/5101

The 2026-27 Budget: Higher Education Overview

Feb 5, 2026 - If one ‑time Non ‑Proposition  98 funding, however, becomes available later this year or over the next few years, we recommend the Legislature use it to place the state on a stronger fiscal footing. Specifically, within the higher education budget, we recommend retiring payment deferrals at CSU and UC and paying for MCS costs in the year in which those costs are incurred (rather than in arrears).
https://lao.ca.gov/Publications/Report/5112

The 2026-27 Budget: Framework for Approaching the Natural Resources, Environmental Protection, and Agriculture Budget

Feb 10, 2026 - With a heightened possibility of a market downturn —and resulting drop in income tax revenues —adopting the administration ’s revenue assumption would put the state on precarious footing. Further amplifying this precariousness, even under the administration ’s revenues, the budget is only roughly balanced in 2026 ‑27.
https://lao.ca.gov/Publications/Report/5116