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

Feb 20, 2026 - Further, despite large revenue upgrades since June, the budget for this year remains roughly balanced. Recommend Using Windfall to Reduce Reliance on Reserves and Borrowing. Accordingly, if windfall resources are available at the May Revision, we recommend the Legislature use them to reduce the reliance on the use of reserves and borrowing in the current year.
https://lao.ca.gov/Publications/Report/5133

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - As we described in our November Fiscal Outlook , the recent stronger-than-expected revenue trends are almost entirely explained by the personal income tax (PIT), which has seen double digit growth this year.
https://lao.ca.gov/Publications/Report/5104

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

Jan 12, 2026 - However, deposits are later revised or “trued up ” to reflect updated revenue estimates in the subsequent two fiscal years. This occurs even if the initial deposit was suspended. In last year ’s budget, the state suspended the initial BSA deposit for 2025 ‑26.
https://lao.ca.gov/Publications/Report/5101