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

Jan 12, 2026 - Ongoing, the Governor ’s spending ‑related solutions provide $5  billion in savings within a few years. Appendix 1 provides a list of the Governor ’s budget solutions. Generates $5.6 Billion School and Community College Settle‑Up Obligation in 2025‑26.
https://lao.ca.gov/Publications/Report/5101

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - There are signs of similar market overexuberance related to AI happening now. At this point, stock prices are trading at a rich premium relative to corporate profits. Moreover, investors have been aggressive in taking on high levels of margin debt (borrowing to buy stocks), which has reached approximately three times the historical norm.
https://lao.ca.gov/Publications/Report/5104

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

Feb 20, 2026 - For example, we recommend the Legislature: Do Not Suspend the $3  Billion True Up Into the Budget Stabilization Account (BSA). The Governor ’s budget proposes suspending a roughly $3  billion true-up deposit that otherwise would be required in 2025-26.
https://lao.ca.gov/Publications/Report/5133