The 2026-27 Budget [Publication Details]

Jan 1, 2026 - As we release publications aimed at addressing the 2026-27 budget situation, we will add them to this index page.
https://lao.ca.gov/Publications/Detail/5107

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Whereas California’s labor market has stagnated over the last two years, the S&P 500 stock index has appreciated roughly 50 percent over the same period. And most of this increase has come from skyrocketing share prices among a handful of firms associated with innovations in Artificial Intelligence (AI).
https://lao.ca.gov/Publications/Report/5104

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Furthermore, a single company (Nvidia) accounts for about one ‑third of the total gains in the S &P 500 stock index over the last year. Overall, without more positive signs from the broader California economy, it is difficult to be highly confident in the recent revenue recovery.
https://lao.ca.gov/Publications/Report/4939

The 2023-24 Budget: Considering Inflation's Effects on State Programs

Nov 16, 2022 - The California Necessities Index—a measure of price inflation for basic goods such as food and clothing that is relevant for some human services programs—grew by 6.6 percent in 2021, compared to an average of 3.6 percent over the previous five years.
https://lao.ca.gov/Publications/Report/4647

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - The state calculates the statutory COLA each year based on a price index published by the federal government. For 2024 ‑25, the budget provides $1  billion to cover a 1.07  percent COLA for existing school and community college programs.
https://lao.ca.gov/Publications/Report/4922

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

Apr 19, 2023 - Although inflation, as measured by the consumer price index, appears to be trending down from the recent peak of 9.1  percent in June 2022, as of March, it remained 5  percent, or 2.5 times the Federal Reserve ’s (the Fed ’s) target.
https://lao.ca.gov/Publications/Report/4762

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - It is not surprising, therefore, that over the years, the budgets of many U.S. states, including California, have increased faster than the Consumer Price Index given that large shares of their budgets go toward funding education, health care, and human services.
https://lao.ca.gov/Publications/Report/4653