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 - 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

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

Jan 12, 2026 - The  Governor ’s budget also includes some proposals that provide savings in future years (that is, in 2027 ‑28 and after). This includes proposals to: (1)  remove the state ’s share of costs associated with growth in IHSS hours per case, which we estimate could save $650  million by 2029 ‑30 (if hours continue to grow at their current rates); (2)  make an ongoing reduction to
https://lao.ca.gov/Publications/Report/5101

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - This post presents our office ’s forecast of the condition of the state General Fund budget through 2027 ‑28 under our revenue estimates and assuming the Governor ’s May Revision policies are adopted.
https://lao.ca.gov/Publications/Report/4907

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Notably, this cost shift is intended to continue on an ongoing basis—meaning costs incurred in 2026‑27 would be recognized in 2027‑28, and so on. Undoing this maneuver in the future will require the state to pay for two years’ worth of program costs in a single fiscal year.
https://lao.ca.gov/Publications/Report/5079

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 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - In total, the spending plan maintains a total of $29  billion for these packages across a seven ‑year period (2021 ‑28), which represents 79  percent of the original multiyear planned amounts ($36  billion).
https://lao.ca.gov/Publications/Report/4922

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

Jan 13, 2024 - We define a delay as an expenditure reduction that occurs in the budget window (2022 ‑23 through 2024 ‑25), but has an associated expenditure increase in a future year of the multiyear window (2025 ‑26 through 2027 ‑28).
https://lao.ca.gov/Publications/Report/4825

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

May 17, 2025 - The June 2024 budget package included $28  billion in budget solutions for 2025 ‑26, although savings from some of these actions have since diminished. We provided further detail and updated estimates of these solutions in our January report, The 2025 ‑26 Budget: Overview of the Governor ’s Budget (see Appendix 1 ).
https://lao.ca.gov/Publications/Report/5044

The 2023-24 Budget: Initial Comments on the Governor's May Revision

May 15, 2023 - The 2023-24 Budget: Initial Comments on the Governor's May Revision Appendices Key Takeaways Governor ’s May Revision Solves a $28  Billion Budget Problem. The figure below summarizes the budget solutions that the Governor proposes using to address the $28.3  billion budget problem.
https://lao.ca.gov/Publications/Report/4769