California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The added risk variable weighs on the range of revenue outcomes that we view as most plausible. The middle of the range, which becomes our main revenue forecast, is thus lower than if we did not include the stock market risk indicator.
https://lao.ca.gov/Publications/Report/5104

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - Figure  2 displays the distribution of the most likely revenue outcomes over the multiyear (in gray). The dark line shows the administration ’s forecast of revenues in the May Revision. The light green line shows the amount of revenue the state would need to “break even ” —that is, the level of revenue the state would need to be able to afford the level of spending proposed in the May Revision.
https://lao.ca.gov/Publications/Report/4907

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

Nov 15, 2024 - As such, our independent fiscal assessment underlies the Legislature ’s ability to assert an informed check on the executive branch, making any added complexity from diverging estimates a worthwhile trade-off.
https://lao.ca.gov/Publications/Report/4938

The 2024-25 Budget: Deficit Update

Feb 20, 2024 - For example, the administration frequently displayed “operating surpluses ” in its multiyear forecasts excluding this type of spending —implying that the administration understood that the state could not afford all of the commitments under its own projections, but the state could afford the ongoing budget.
https://lao.ca.gov/Publications/Report/4850

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

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

May 17, 2021 - First, the administration will stop counting vehicle registration fees as proceeds of taxes. Second, the administration is making an administrative correction of its treatment of school-related deferrals.
https://lao.ca.gov/Publications/Report/4432

The 2023-24 Budget: California's Fiscal Outlook

Nov 16, 2022 - Figure  3 displays our estimates of the budget ’s condition over the outlook period. As the figure shows, in addition to the $24  billion budget problem the state faces in 2023 ‑24, the state faces annual operating deficits which decline from $17  billion to $8  billion by 2026 ‑27.
https://lao.ca.gov/Publications/Report/4646

The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - Put another way, despite the operating surpluses we display in Figure 6, the budget might not have much capacity for new, ongoing spending that does not meet the SAL requirements. Would the Budget Still Break Even if Revenues Are Lower?
https://lao.ca.gov/Publications/Report/4472

The 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - Figure  2 displays the distribution of the most likely revenue outcomes over the multiyear (in light purple). As seen in the figure, while the revenues required to balance the budget (in green) are optimistic, but plausible, in the budget window, they are improbable in the out ‑years.
https://lao.ca.gov/Publications/Report/4772