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 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - This year, for example, our outlook reflects our best estimates of the effects of H.R. 1: One Big Beautiful Bill Act on the state budget but does not make assumptions about future federal policy changes.
https://lao.ca.gov/Publications/Report/5091

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

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - Other downturns, such as the 2001 so-called dot-com recession, had severe fiscal implications while inflicting somewhat milder economic damage. The 2008 Great Recession had brutal effects on both the state ’s economy and budget.
https://lao.ca.gov/Publications/Report/4762

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Note that while the state is also making a $7.1  billion withdrawal from the BSA in 2025 ‑26, this withdrawal is not reflected in Figure  1 because it was authorized in the 2024 ‑25 budget package. The remainder of this section provides additional detail on each category of solution.
https://lao.ca.gov/Publications/Report/5079

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

Jan 12, 2026 - As such, the administration ’s revenue estimate exceeds ours by almost $30  billion across the budget window (2024 ‑25 through 2026 ‑27). This  higher revenue assumption substantially improves the budget condition relative to our forecast and is the main driving difference between our estimates of the deficit.
https://lao.ca.gov/Publications/Report/5101

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

May 17, 2025 - For  example, this includes a proposal to provide $1.3  billion less in total funding for schools and community colleges than the estimated constitutional minimum for 2024 ‑25. This yields one ‑time General Fund savings in that year but creates a “settle ‑up ” obligation that will need to be paid in a future year if 2024 ‑25 revenues remain unchanged.
https://lao.ca.gov/Publications/Report/5044

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

Feb 20, 2026 - Figure 1 The State ’s New Wall of Debt (In Billions)
https://lao.ca.gov/Publications/Report/5133

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

Jan 13, 2025 - In total, the Governor ’s budget assumes that state operations costs are reduced by $2.1  billion ($1  billion General Fund) in 2024 ‑25 and $2.6  billion ($1.4  billion General Fund) in 2025 ‑26 and ongoing.
https://lao.ca.gov/Publications/Report/4951