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 2024-25 Budget: Overview of the Governor's Budget

Jan 13, 2024 - Specifically, we suggest the Legislature: (1) plan for lower revenues, (2) maintain a similar reserve withdrawal, (3) develop a plan for school and community college funding, (4) maximize reductions in one ‑time spending, and (5) apply a higher bar for any discretionary proposals and contain ongoing service level.
https://lao.ca.gov/Publications/Report/4825

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: Deficit Update

Feb 20, 2024 - (Due to specific circumstances this year, changes in revenues are unlikely to have a significant effect on the state’s other major formula-driven spending requirements, specifically related to Proposition 2.)
https://lao.ca.gov/Publications/Report/4850

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

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

The 2023-24 Budget: Overview of the Spending Plan (Final Version)

Oct 16, 2023 - The 2023-24 Budget: Overview of the Spending Plan (Final Version) Overview of the Spending Plan (Final Version) Appendix 4: Large One-Time and Temporary Augmentations Transportation Appendix 4, Figure 1 Remaining Large One ‑Time and Temporary Augmentations From the 2021 ‑22 and 2022 ‑23 Budget Packages: Business and Labor General Fund (In millions) Begin new
https://lao.ca.gov/Publications/Report/4788/4

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Proposition 2 Proposition   2 Contains Annual Debt Payment Requirement. Proposition  2 created new rules regarding: (1)  deposits into the state ’s rainy ‑day fund and (2)  accelerating payments toward certain eligible debts.
https://lao.ca.gov/Publications/Report/4887

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

Apr 26, 2021 - (We provide additional background and detail on the remaining eligible uses of Proposition  2 here .) Figure 4 Outstanding State ‑Only Eligible Uses of Proposition 2 (In Billions)
https://lao.ca.gov/Publications/Report/4418

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

May 17, 2024 - In addition, the May Revision includes $4  billion in reserve withdrawals, $1  billion in cost shifts, and about $2  billion in revenue-related solutions. Online appendices 1 and 2 (forthcoming) list all of the solutions by area.
https://lao.ca.gov/Publications/Report/4902