California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Were the markets to drop considerably, budget problems would be tens of billions of dollars larger, necessitating even deeper cuts and/or tax increases. These challenges would not be short-lived either.
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

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: Community College Facilities

Mar 17, 2026 - Of the ten new projects included in the Governor ’s budget, seven are at campuses that already received Proposition  2 funding for a different project in 2025-26. While these campuses may have significant facility needs, they are likely also benefiting from certain other scoring metrics.
https://lao.ca.gov/Publications/Report/5159

Property tax rules for inherited property. [Ballot]

Jan 21, 2026 - The net effect on county administrative costs is unclear but likely would not exceed the low tens of millions of dollars annually. Summary of Fiscal Effects. We estimate that this measure would have the following major fiscal effects: Many homeowners ages 60 or older would pay lower property taxes.
https://lao.ca.gov/BallotAnalysis/Initiative/2025-035

The 2026-27 Budget: University of California

Feb 26, 2026 - With this additional funding, UC likely would: Provide salary increases for nonrepresented and represented employees. We estimate each  1  percent increase in payroll would cost $55  million in 2026 ‑27.
https://lao.ca.gov/Publications/Report/5143

Artificial intelligence and child safety. [Ballot]

Jan 27, 2026 - The total level of these state costs would vary year-to-year but would likely range from the millions to tens of millions of dollars annually. Other Fiscal Effects. The measure could have additional fiscal effects on state and local governments.
https://lao.ca.gov/BallotAnalysis/Initiative/2025-036

The 2026-27 Budget: Judicial Branch

Feb 11, 2026 - In combination, as shown in Figure  3 , it makes it likely that at least $21  billion could be needed to complete the list of 80 projects. These costs will likely continue to increase over time due to inflation and various other factors.
https://lao.ca.gov/Publications/Report/5113

Oversight of certain nonprofit charities and related entities. [Ballot]

Jan 20, 2026 - These costs would vary from year-to-year, but would likely range from the millions of dollars to the tens of millions of dollars annually —but could reach into the low hundreds of millions of dollars annually.
https://lao.ca.gov/BallotAnalysis/Initiative/2025-032