California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The current discrepancy over the size of the state ’s budget deficit —$18  billion under the Legislative Analyst ’s Office estimate versus $3  billion in the Governor ’s budget —fits squarely within that pattern.
https://lao.ca.gov/Publications/Report/5104

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

Jan 12, 2026 - Governor’s Budget Roughly Balanced on Higher Revenues In November, We Anticipated the State Faced an $18   Billion Deficit. In our November Fiscal Outlook report, we estimated that the state faced an $18  billion budget problem.
https://lao.ca.gov/Publications/Report/5101