California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Given that this deficit is estimated to range from $20  billion to $35  billion in the years ahead, addressing it gradually, rather than all at once, reduces fiscal disruption and more readily provides for legislative input and flexibility.
https://lao.ca.gov/Publications/Report/5104

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

Apr 26, 2021 - Under the administration ’s revenue estimates, the state would need to make a true up deposit of $1  billion in 2019 ‑20. This is due to an increase in the capital gains revenue estimate in that year, from $14.5  billion (at 2 019 ‑20 Budget Act ) to $16.5  billion at Governor ’s budget. $3.2  Billion True Up for 2020 ‑21.
https://lao.ca.gov/Publications/Report/4418

The 2021-22 Spending Plan: Other Provisions

Sep 23, 2021 - Eligible Firms ’ Gross Receipts Must Have Declined in 2020. To be eligible, a firm ’s gross receipts must have dropped by at least 20  percent from 2019 to 2020. Firms that file taxes on a fiscal year basis must have incurred a decline of 20  percent or more in 2018 ‑19 as compared to either (1)  2019 ‑20 or (2)  the average of 2019 ‑20 and 2020 ‑21.
https://lao.ca.gov/Publications/Report/4452

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

Jan 12, 2026 - Both our office and the administration expect the state to face multiyear deficits, with estimates ranging from $20  billion to $35  billion annually. These deficits are concerning for three reasons.
https://lao.ca.gov/Publications/Report/5101

The 2021-22 Budget: The Governor’s Suspension Proposal

Jan 29, 2021 - This language was included in both the 2019 ‑20 and 2020 ‑ 21 b udget acts. How the Suspensions Work. Current law empowers the Department of Finance (DOF) to administer the suspension calculation. The formula is shown in Figure  1 .
https://lao.ca.gov/Publications/Report/4328

Rethinking California's Reserve Policy

Apr 10, 2025 - Since 2014, the state has suspended and made withdrawals from the BSA in two years: 2020 ‑21 and 2024 ‑25. In addition, there is a withdrawal planned for 2025 ‑26 under legislative action taken last year.
https://lao.ca.gov/Publications/Report/5028

The 2021-22 Budget: Initial Comments on the Governor’s May Revision

May 17, 2021 - Reflecting very strong cash collections in recent months, the May Revision adjusts 2020 ‑21 revenues (and transfers) up by $26.8  billion to $182  billion. This represents a 27  percent increase over 2019 ‑20, the largest single year increase in over four decades.
https://lao.ca.gov/Publications/Report/4432

The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - Our forecast for state contributions to the California State Teachers ’ Retirement System (CalSTRS) in the outyears uses the pension system ’s most recent actuarial valuation, which reflects CalSTRS ’ 3.9 percent investm ent returns in 2019‑20.
https://lao.ca.gov/Publications/Report/4472

The 2022-23 California Spending Plan: Other Provisions

Sep 27, 2022 - In anticipation of a severe economic recession, the 2020-21 Budget Act adopted limits on NOLs and credits for tax years 2020, 2021, and 2022. While the 2020 recession was severe, the fiscal effects were smaller than anticipated and the recession was followed by strong economic growth across many sectors of the economy.
https://lao.ca.gov/Publications/Report/4626

The 2022-23 Budget: Fiscal Outlook for Schools and Community Colleges

Nov 17, 2021 - For the upcoming budget cycle, the Legislature has nearly $20 billion to allocate for new commitments, including $10.2  billion in one ‑time funds related to 2020 ‑21 and 2021 ‑22 and $9.5 billion in ongoing funds related to 2022 ‑23.
https://lao.ca.gov/Publications/Report/4473