California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The added risk variable weighs on the range of revenue outcomes that we view as most plausible. The middle of the range, which becomes our main revenue forecast, is thus lower than if we did not include the stock market risk indicator.
https://lao.ca.gov/Publications/Report/5104

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

Rethinking California's Reserve Policy

Apr 10, 2025 - Options to Reach This Higher Threshold If the cap is raised substantially—ideally to 50 percent by 2055—the state would also need to set aside more in reserve deposits to dependably reach this higher amount.
https://lao.ca.gov/Publications/Report/5028

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - As such, our independent fiscal assessment underlies the Legislature ’s ability to assert an informed check on the executive branch, making any added complexity from diverging estimates a worthwhile trade-off.
https://lao.ca.gov/Publications/Report/4938

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - Finally, although we have not previously recommended the Leg islature take decisive action to address the structural deficits, the state ’s persistent fiscal imbalance and the added downside risks —particularly from potential federal actions —suggest a need for a more proactive approach.
https://lao.ca.gov/Publications/Report/5044

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

Apr 26, 2021 - Required Infrastructure Spending After BSA Reaches Threshold Level. Under Proposition  2, the state must continue to deposit funds into the BSA until it reaches a threshold balance of 10  percent of General Fund tax revenue.
https://lao.ca.gov/Publications/Report/4418

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Outside of government and health care, the state has added no jobs in a year and a half. Similarly, the number of Californians who are unemployed is 25  percent higher than during the strong labor markets of 2019 and 2022.
https://lao.ca.gov/Publications/Report/4939

The 2023-24 Budget: State Appropriations Limit Estimates

Feb 1, 2023 - Specifically, while the state might have more room in years when revenue growth is lower than historical averages—such as this year—over the long term, we expect the state to continue to reach the limit.
https://lao.ca.gov/Publications/Report/4667

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

Jan 13, 2025 - Taken together, the administration estimates these proposals would reduce revenues by around $150  million in 2025 ‑26, reaching $300  million by  2028 ‑29. Discretionary Reserves Sets Discretionary Reserve Balance to $4.5   Billion.
https://lao.ca.gov/Publications/Report/4951

The 2022-23 Budget: State Appropriations Limit Implications

Mar 30, 2022 - As Figure  3  shows, if revenues grow faster than the median (as shown in figure  1) the state is very likely to face large —and growing —SAL requirements, reaching somewhere between $20  billion and $45  billion by 2025 ‑26.
https://lao.ca.gov/Publications/Report/4583