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 - However, our Fiscal Outlook revenue forecast, shown in Figure  2 , reflects a smaller, temporary upgrade which reverses beginning in 2026 ‑ 27 —resulting in 2026 ‑27 revenues being in line with budget act estimates.
https://lao.ca.gov/Publications/Report/5091

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - The main trade ‑off is that it would mean the state pays less toward unfunded liabilities in aggregate compared to recent Proposition  2 related actions. Apply 2023 ‑24 and 2024 ‑25 Proposition   2 Payments to Supplant State CalPERS Contributions in 2024 ‑25 and 2025 ‑26.
https://lao.ca.gov/Publications/Report/4887

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

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

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - The withdrawal was made pursuant to the Governor ’s disaster declaration in response to the coronavirus disease 2019 (COVID-19) public health emergency and proclamation of a budget emergency on June 25, 2020.
https://lao.ca.gov/Publications/Report/4418

Rethinking California's Reserve Policy

Apr 10, 2025 - (Under the language of Proposition  2, “resources available ” includes both revenues and the entering fund balance.) Since 2014, the state has suspended and made withdrawals from the BSA in two years: 2020 ‑21 and 2024 ‑25.
https://lao.ca.gov/Publications/Report/5028

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - (The difference between these two —over $2   billion —increases the budget problem.) Actions Taken Last Year Reduce the Budget Problem. In June 2024, the Legislature not only addressed the budget problem for 2024 ‑25 but also proactively adopted solutions intended to reduce the anticipated shortfall in 2025 ‑26.
https://lao.ca.gov/Publications/Report/5079

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

Jan 12, 2026 - As such, the administration ’s revenue estimate exceeds ours by almost $30  billion across the budget window (2024 ‑25 through 2026 ‑27). This  higher revenue assumption substantially improves the budget condition relative to our forecast and is the main driving difference between our estimates of the deficit.
https://lao.ca.gov/Publications/Report/5101

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - For context, the comparable revisions in the prior two budget cycles were $2  billion (2023 ‑24) and $2.7  billion (2022 ‑23). The increase is primarily driven by higher costs in the Medi ‑Cal program, which are projected to exceed January estimates by $10  billion over the three ‑year budget window: roughly $2  billion in 2024 ‑25 and $8  billion in 2025 ‑26.
https://lao.ca.gov/Publications/Report/5044