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 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Outside of government and health care, the state has added no jobs in a year and a half. Similarly, the number of Californians who are unemployed is 25  percent higher than during the strong labor markets of 2019 and 2022.
https://lao.ca.gov/Publications/Report/4939

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

May 17, 2025 - Without this legislative action, the current budget problem would be substantially larger. How Has the Budget Picture Changed Since January? In January, both our office and the administration assessed the budget as roughly balanced.
https://lao.ca.gov/Publications/Report/5044

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 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - Under our outlook, Proposition  98 General Fund spending on schools and community colleges is $89  billion in 2026 ‑ 27 —nearly $12  billion above our projected 2023 ‑24 level and $5  billion higher than the administration ’s projection for 2026 ‑27.
https://lao.ca.gov/Publications/Report/4772

Rethinking California's Reserve Policy

Apr 10, 2025 - In other words, this is our assessment of the reserves that are needed for the state to maintain its core service level over time without cutting core services or raising taxes. Chapter 2: Where Are We Now?
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: State Appropriations Limit Estimates

Feb 1, 2023 - However, the Legislature does have the flexibility to identify its own set of solutions, as well as addr ess a possibly larger budget problem, by reducing excluded spending without additional SAL requirements.
https://lao.ca.gov/Publications/Report/4667

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

Apr 19, 2023 - The alternative would be to solve the currently estimated budget problem without tapping reserves, which we have indicated is possible by curtailing previous temporary spending allocations. The main benefit of this approach is that it would preserve budget flexibility in case the economy were to enter a downturn.
https://lao.ca.gov/Publications/Report/4762

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

Jan 13, 2025 - Instead, the gains appear largely tied to the booming stock market, a situation which can change rapidly and without warning. The  administration appears to share some of these concerns, noting recent job losses among high ‑wage workers and the risks posed by the inherent volatility of tax receipts tied to stock market gains.
https://lao.ca.gov/Publications/Report/4951