California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Moreover, these deficit estimates do not account for a downturn. Were the markets to drop considerably, budget problems would be tens of billions of dollars larger, necessitating even deeper cuts and/or tax increases.
https://lao.ca.gov/Publications/Report/5104

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

Feb 20, 2026 - For example, we recommend the Legislature: Do Not Suspend the $3  Billion True Up Into the Budget Stabilization Account (BSA). The Governor ’s budget proposes suspending a roughly $3  billion true-up deposit that otherwise would be required in 2025-26.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - Proposition  2 requires the state to make annual deposits into the Budget Stabilization Account (BSA), with amounts generally increasing when revenues —particularly those from capital gains —are higher.
https://lao.ca.gov/Publications/Report/5101

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

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

Nov 15, 2024 - The added complexity from the alternative revenue estimates making this possible is a worthwhile price to pay. Reaffirming the LAO ’s Independent Mandate The LAO was established in 1941 because the Legislature sought an independent source of information and analysis —one directly accountable to it and serving as a fiscal watchdog on its behalf.
https://lao.ca.gov/Publications/Report/4938

The 2023-24 Budget: Considering Inflation's Effects on State Programs

Nov 16, 2022 - Lowers Quality of Services. In other budget areas, inflation can result in a reduction of quality, rather than quantity, of services. For example, in county administration of human services programs, less state funding in real terms can mean local governments have lower staffing levels.
https://lao.ca.gov/Publications/Report/4647

Overview of Major Impacts of H.R. 1 – One Big Beautiful Bill Act [Publication Details]

Aug 20, 2025 - Assembly Budget Subcommittee No. 7 on Accountability and Oversight
https://lao.ca.gov/Publications/Detail/5067

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

Rethinking California’s Reserve Policy (Panel 2) [Publication Details]

May 7, 2025 - Assembly Budget Subcommittee No. 7 on Accountability and Oversight
https://lao.ca.gov/Publications/Detail/5041