The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Instead, much of the bounce appears to be tied to special forms of pay for high ‑income workers, such as bonuses and stock  compensation. Booming Stock Market Driving Income Growth. The recent run ‑up in the stock market, which appears tied to optimism surrounding artificial intelligence, is a primary driver of the rapid growth in pay to high ‑income workers.
https://lao.ca.gov/Publications/Report/4939

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

Jan 12, 2026 - Ongoing, the Governor ’s spending ‑related solutions provide $5  billion in savings within a few years. Appendix 1 provides a list of the Governor ’s budget solutions. Generates $5.6 Billion School and Community College Settle‑Up Obligation in 2025‑26.
https://lao.ca.gov/Publications/Report/5101

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

Nov 17, 2021 - The Legislature and Governor previously agreed to ramp up ongoing funding over the next four years —from $1 billion in 2021 ‑22 to about $5 billion by 2025 ‑26. The state could accelerate this schedule, which would give districts more certainty about their funding levels and potentially improve local planning for these  programs.
https://lao.ca.gov/Publications/Report/4473

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - In this publication we: provide an overview of the 2025 ‑26 budget package, give a brief description of how the budget process unfolded, and then highlight the major features of the budget approved by the Legislature and signed by the Governor.
https://lao.ca.gov/Publications/Report/5079

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - There are signs of similar market overexuberance related to AI happening now. At this point, stock prices are trading at a rich premium relative to corporate profits. Moreover, investors have been aggressive in taking on high levels of margin debt (borrowing to buy stocks), which has reached approximately three times the historical norm.
https://lao.ca.gov/Publications/Report/5104

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

Jan 13, 2025 - School and Community College Spending Higher by $5   Billion. Reflecting these higher revenue estimates, the administration ’s estimates of constitutionally required General Fund spending on K ‑14 education is $4.7  billion higher than our November estimates.
https://lao.ca.gov/Publications/Report/4951

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - This is about $5  billion larger than the budget problem anticipated by the administration in June. Figure  3 provides our estimates of the General Fund condition, including our estimate of the budget problem.
https://lao.ca.gov/Publications/Report/5091

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

Rethinking California's Reserve Policy

Apr 10, 2025 - This change need not occur immediately as it will take time for the state to build up reserves through future economic cycles. As such, we suggest the Legislature ask the voters to authorize a scheduled, phased‑in increase: 20 percent to take effect immediately after the next statewide election, 25 percent in 2030, and increasing by 5 percent every five years until the cap reaches a maximum of 50 percent in 2055.
https://lao.ca.gov/Publications/Report/5028

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - Second, it notably reduces how much tax revenue is used for augmentations, instead using more money to help offset General Fund spending ($3.5  billion through 2024 ‑25 and $7.7  billion through 2026 ‑27).
https://lao.ca.gov/Publications/Report/4922