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

Nov 15, 2024 - This, in turn, could prevent the Legislature from grappling with the important risks and trade-offs inherent in their budgeting decisions. Our independent revenue estimates facilitate consideration of these trade-offs in several ways.
https://lao.ca.gov/Publications/Report/4938

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - The Legislature likely will need to adopt additional solutions that increase ongoing revenues or reduce ongoing spending —both of which involve the most difficult and consequential trade-offs for policy makers.
https://lao.ca.gov/Publications/Report/5052

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - The main trade ‑off is that additional budget solutions would be required in 2024 ‑25 and beyond. Keep Policy Consistent With Recent Past. Unfunded liabilities affect the state ’s finances for decades.
https://lao.ca.gov/Publications/Report/4887

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - Oversight of special funds and the associated activities also is an important area for legislative oversight, but it usually does not involve the same trade-offs as assessing the suite of General Fund programs.
https://lao.ca.gov/Publications/Report/4983

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Why We Advise Holding Off on Using Reserves for Now. The main benefit of reserves is that they help the state to maintain its core spending over the long term, despite the state ’s volatile revenue structure.
https://lao.ca.gov/Publications/Report/4687

Rethinking California's Reserve Policy

Apr 10, 2025 - As such, we think a reserve policy that covers three ‑quarters of funding shortfalls is adequate while balancing these  trade ‑offs. Keep Existing Formulas, but Set Aside All Excess Capital Gains Although there would be many advantages to replacing the existing Proposition  2 formulas with something simpler and more robust, we understand that it might be easier to reach agreement on reserve changes that build off existing policies rather than replace them.
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: State Appropriations Limit Estimates

Feb 1, 2023 - Conclusion In a 2022 report , we noted that, over the long term, the Legislature faces a fundamental trade-off regarding SAL. Specifically, while the state might have more room in years when revenue growth is lower than historical averages—such as this year—over the long term, we expect the state to continue to reach the limit.
https://lao.ca.gov/Publications/Report/4667

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

Jan 13, 2025 - This means that, going forward, decisions to balance the budget will involve more difficult trade ‑offs. We recommend the Legislature use the next few months to review program performance to develop its own approach to addressing the deficits.
https://lao.ca.gov/Publications/Report/4951

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

Apr 19, 2023 - We hasten to add, however, that our guidance is not meant to suggest that reserves should be deemed off limits regardless of circumstances, for example, in the event that deteriorating economic conditions result in new projections showing a larger budget problem that cannot be solved without encroaching on the state ’s core operations.
https://lao.ca.gov/Publications/Report/4762

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - Second, the Governor proposes ongoing spending reductions that total $8  billion within a few years, which involve trade-offs and, in some cases, reductions to core service levels. Although the administration ’s focus for ongoing reductions tends to be on newer programs and program expansions, there could be longer-standing programs that the Legislature wishes to revisit.
https://lao.ca.gov/Publications/Report/4902