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

Feb 20, 2026 - Make a Smaller Withdrawal From the BSA. The Governor ’s budget also maintains a $7  billion withdrawal from the BSA in 2025-26. If a May Revision windfall exceeds the amount needed to fund the true up, we recommend the Legislature use those resources to reduce the size of this withdrawal.
https://lao.ca.gov/Publications/Report/5133

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - After the dot-com bust and the Great Recession, it took four and five years, respectively, for revenues to recover. Incorporating revenue risk into the budget now, therefore, reflects prudence, not pessimism.
https://lao.ca.gov/Publications/Report/5104

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Three of those —the recession in the early 1990s, the dot ‑com bust in the early 2000s, and the Great Recession —resulted in large revenue shortfalls and ensuing multiyear deficits, even for some years after each recession ended.
https://lao.ca.gov/Publications/Report/4687

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028

The 2024-25 Budget: Overview of the Governor's Budget

Jan 13, 2024 - Reserve Withdrawals Budget Stabilization Account. Proposition  2 (2014) governs deposits into and withdrawals from the state ’s general ‑purpose constitutional reserve —the Budget Stabilization Account (BSA).
https://lao.ca.gov/Publications/Report/4825

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - (This results in a corresponding increase in the mandatory withdrawal, from $4.7  billion to $6.5  billion.) Under the state ’s interpretation of the withdrawal rules in the case of a disaster, the state could withdraw any amount from either the optional or mandatory balance in 2020 ‑21.
https://lao.ca.gov/Publications/Report/4418

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Importantly, these budget solutions also included a planned withdrawal from the state ’s rainy ‑day fund, the Budget Stabilization Account (BSA), of $7.1  billion. The June 2025 spending plan maintains these actions, including the reserve withdrawal.
https://lao.ca.gov/Publications/Report/5079

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - In the May Revision, the Governor proposes withdrawing about $3  billion from the BSA —significantly less than the roughly $12  billion withdrawal proposed in January. Safety Net Reserve . Similar to January, the Governor also proposes withdrawing the entire balance of the Safety Net Reserve —$900  million.
https://lao.ca.gov/Publications/Report/4902

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - Withdraw Reserves State Could Withdraw Up to $24   Billion in General Purpose Reserves. As shown in Figure  3, the state has $23  billion in the BSA under our estimates, plus about $1  billion in the Safety Net Reserve, to address the budget problem.
https://lao.ca.gov/Publications/Report/4819

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

Jan 13, 2025 - The Governor ’s budget maintains an already planned withdrawal from the state ’s rainy day fund, which we think is a reasonable choice. Since 2023 ‑24, the Legislature has addressed a cumulative total of $82  billion in budget problems, but even including the withdrawal for 2025 ‑26, has only used about half of the Budget Stabilization Account (BSA).
https://lao.ca.gov/Publications/Report/4951