California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Despite our view that there is a strong possibility of a market downturn, however, our revenue forecast does not assume one will occur. Rather, we ’ve incorporated the elevated risk of a downturn into our estimates.
https://lao.ca.gov/Publications/Report/5104

How Have Past Stock Market Downturns Affected Income Tax Revenue? [EconTax Blog]

Mar 9, 2026 - By most measures, the global financial crisis was more severe than the dot-com crash. The state 's unemployment rate, for example, peaked at 7 percent following the dot-com crash but reached nearly double that during the financial crisis and remained elevated for much longer.
https://lao.ca.gov/LAOEconTax/Article/Detail/852

How Have Past Stock Market Downturns Affected Income Tax Revenue? [EconTax Blog]

Mar 9, 2026 - By most measures, the global financial crisis was more severe than the dot-com crash. The state 's unemployment rate, for example, peaked at 7 percent following the dot-com crash but reached nearly double that during the financial crisis and remained elevated for much longer.
https://lao.ca.gov/LAOEconTax/article/Detail/852

The 2026-27 Budget: Department of Justice

Feb 11, 2026 - In contrast, the 2024-25 budget package included $16.2  million in 2024-25 (decreasing to $11.9  million annually in 2028-29) —mostly from the General Fund —for the implementation of five pieces of enacted legislation and the continuation of FITSM.
https://lao.ca.gov/Publications/Report/5118

The 2026-27 Budget: Re-Envisioning State Education Governance

Mar 18, 2026 - Current Governance Structure Lacks a Clear Path for Resolving Disagreements Between SBE and SPI. The SBE and the SPI have disagreed many times about the extent of their authority or the meaning of state laws.
https://lao.ca.gov/Publications/Report/5165

The 2026-27 Budget: Proposed Elimination of State Environmental Positions

Feb 17, 2026 - This was one of the key arguments JLBC cited for opposing their permanent elimination. For example, at the California Department of Fish and Wildlife (CDFW), positions include game wardens who prov ide important law enforcement and wildlife and resource protection services.
https://lao.ca.gov/Publications/Report/5124

The 2026-27 Budget: Proposed Zero-Emission Vehicle Incentive

Feb 24, 2026 - The Governor proposes $200  million on a one ‑time basis ($115  million from GGRF and $85  million from APCF), along with associated budget trailer legislation to create a new incentive program for light ‑duty ZEVs.
https://lao.ca.gov/Publications/Report/5140

Oversight of certain public benefit artificial intelligence (AI) companies. [Ballot]

Jan 20, 2026 - The measure would have the following major fiscal effects: Increased state costs that would likely be in the tens of millions of dollars annually to establish and operate a new regulatory commission overseeing certain public benefit AI com panies.
https://lao.ca.gov/BallotAnalysis/Initiative/2025-033

The 2026-27 Budget: CDTFA’s Cannabis and Tobacco Programs

Feb 23, 2026 - LAO Recommendations Approach Proposals as Pieces of a Bigger Policy Puzzle. Cannabis and tobacco compliance present an ongoing policy challenge for the Legislature. Accordingly, we recommend that the Legislature approach the Governor ’s proposals not as one ‑time workload adjustments, but as components of a broader, more sustained effort to address these policy challenges.
https://lao.ca.gov/Publications/Report/5132

The 2026-27 Budget: Office of Emergency Services Next Generation 911 System

Feb 27, 2026 - In November 2025, OES released a revised transition plan shifting from the regional model to a statewide approach with one primary and one back ‑up provider. OES now projects decommissioning the legacy system in 2030 —eight years later than previously planned under the regional model.
https://lao.ca.gov/Publications/Report/5145