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

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

Rethinking California's Reserve Policy

Apr 10, 2025 - While the state neared this cap in the 2019 ‑20 budget, the cap has only been operative twice: in 2022 ‑23 and 2023 ‑24. All  told, had there not been a cap on constitutional deposits, the state would have deposited about $2  billion more in reserves.
https://lao.ca.gov/Publications/Report/5028

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

Jan 12, 2026 - This includes proposals to: (1)  remove the state ’s share of costs associated with growth in IHSS hours per case, which we estimate could save $650  million by 2029 ‑30 (if hours continue to grow at their current rates); (2)  make an ongoing reduction to the Middle Class Scholarship program, which generates $541  million in savings beginning in 2027 ‑28; and (3)  make $12  million in previously provided ongoing federal ‑related litigation funding limited term.
https://lao.ca.gov/Publications/Report/5101

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

Nov 17, 2021 - To mitigate increases in district contributions, the state allocated more than $3  billion non ‑Proposition 98 General Fund for district cost relief over the 2019 ‑20 through 2021 ‑22 period. As this relief expires, district contributions are expected to grow significantly.
https://lao.ca.gov/Publications/Report/4473

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

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 Spending Plan

Oct 16, 2025 - On March  12, the administration notified the Joint Legislative Budget Committee it had transferred $3.4  billion General Fund (around the maximum allowed) to the MPIP Fund to cover unanticipated cost increases in Medi ‑Cal.
https://lao.ca.gov/Publications/Report/5079

The State Appropriations Limit

Apr 21, 2021 - Over the past two years, the state has spent billions of dollars on the coronavirus disease 2019 (COVID ‑1 9) p ublic health emergency. The administration currently estimates direct response costs related to COVID ‑19 will be $ 15  b illion across 2019 ‑ 20 t hrough 2021 ‑22.
https://lao.ca.gov/Publications/Report/4416