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 2025-26 Budget: California Spending Plan Series [Publication Details]

Oct 16, 2025 - The 2025-26 Budget: California Spending Plan Series [Publication Details] Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only.
https://lao.ca.gov/Publications/Detail/5105

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - For California, the dot ‑com era —when stocks rose and then fell precipitously in response to widespread adoption of the internet —offers the most salient example. The internet has proven to be a transformative technology and, yet, the stock market ’s initial reaction was clearly overly exuberant.
https://lao.ca.gov/Publications/Report/5091

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

Feb 20, 2026 - The Governor ’s budget proposes suspending a roughly $3  billion true-up deposit that otherwise would be required in 2025-26. We recommend the Legislature not suspend this deposit. Make a Smaller Withdrawal From the BSA.
https://lao.ca.gov/Publications/Report/5133

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

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

Jan 12, 2026 - Although the settle‑up proposal responds to revenue risk in the current year, downside risk to revenues is likely greater in 2026‑27 than it is in 2025‑26. Suspends BSA True ‑Up Deposit for 2025 ‑26.
https://lao.ca.gov/Publications/Report/5101

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

May 17, 2025 - 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

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - In this section, we first present our estimates of the budget problem the Legislature addressed in the 2025 ‑26 budget package, focusing on the three ‑year budget window under consideration: 2023 ‑24 through 2025 ‑26.
https://lao.ca.gov/Publications/Report/5079

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028