The 2026-27 Budget: Overview of the Governor's Budget [Publication Details]

Jan 12, 2026 - On January 9, 2026, Governor Newsom’s administration presented its proposed state budget to the California Legislature. In this report, we provide a high-level summary and our initial analysis of the Governor’s budget based on our preliminary review (as of January 10). Assembly Budget Handout (PDF) Senate Budget and Fiscal Review Handout (PDF)
https://lao.ca.gov/Publications/Detail/5101

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

Jan 12, 2026 - On a technical basis, it can be thought of as the end balance of the state ’s General Fund —the money that remains after accounting for all of the state ’s expected revenues and spending. The State Constitution has a balanced budget requirement, which means the balance of the SFEU must be set above zero for the upcoming fiscal year.
https://lao.ca.gov/Publications/Report/5101

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

Feb 20, 2026 - Instead, using one-time resources to improve budget resilience would help the state meet its coming fiscal challenges. Figure 1 The State ’s New Wall of Debt (In Billions)
https://lao.ca.gov/Publications/Report/5133

The 2026-27 Budget: How to Use One-Time Revenue Improvements [Publication Details]

Feb 20, 2026 - Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook, we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse. Further, the state faces significant structural deficits in the future.
https://lao.ca.gov/Publications/Detail/5133

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Rather, the issue is whether a wait-and-see approach suffices or whether this long-standing risk to California ’s finances should be incorporated into the state ’s budget assumptions from the start. Unpacking this question calls for revisiting what is driving the state ’s current revenue boom.
https://lao.ca.gov/Publications/Report/5104