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

Jan 12, 2026 - Any level above that is up to the discretion of the Legislature. As a result, we consider the entire balance of the SFEU to be a discretionary choice. That said, recent budgets have set the SFEU bet ween $3.5  billion and $4.5  billion, so the Governor ’s budget proposal to set the balance to $4.5  billion is generally in line with recent policy.
https://lao.ca.gov/Publications/Report/5101

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

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Second, the Governor proposed suspending a $2.8  billion true-up deposit to the state ’s reserve that otherwise would be required. This proposal helps balance the budget but runs counter to the basic fiscal logic that stronger-than-expected revenues should be used to build reserves.
https://lao.ca.gov/Publications/Report/5104