Rethinking California's Reserve Policy

Apr 10, 2025 - Asset market downturns, like stock market drops or real estate slumps, can also reduce capital gains tax revenue and other investment ‑related income, lowering state revenue. Conversely, revenues can grow quickly in response to economic expansions or run ups in the stock market.
https://lao.ca.gov/Publications/Report/5028

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - For example, is the program aimed at a well-understood gap or market failure? Does the problem still exist in the way it did when the program was created? The Legislature can then assess whether the program is designed to address that problem.
https://lao.ca.gov/Publications/Report/4983

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - Instead, the gains appear largely tied to the booming stock market, a situation which can change rapidly and without warning. The  administration appears to share some of these concerns, noting recent job losses among high ‑wage workers and the risks posed by the inherent volatility of tax receipts tied to stock market gains.
https://lao.ca.gov/Publications/Report/4951