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: Multiyear Budget Outlook

May 23, 2024 - The light green line shows the amount of revenue the state would need to “break even ” —that is, the level of revenue the state would need to be able to afford the level of spending proposed in the May Revision.
https://lao.ca.gov/Publications/Report/4907

The 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - As seen in the figure, while the revenues required to balance the budget (in green) are optimistic, but plausible, in the budget window, they are improbable in the out ‑years. For example, to eliminate the operating deficit in 2024 ‑25, revenues would need to be roughly $30  billion higher than our forecast (in dark purple).
https://lao.ca.gov/Publications/Report/4772

Rethinking California's Reserve Policy

Apr 10, 2025 - Reserves help smooth the difference —funds are saved when revenues are surging (the green regions in the figure below) and then spent when revenues decline below that long ‑term trajectory (the red regions).
https://lao.ca.gov/Publications/Report/5028

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 2022-23 Budget: State Appropriations Limit Implications

Mar 30, 2022 - If the Governor ’s budget proposals that do not meet a SAL requirement are rejected (and those funds are saved instead [blue bars]), the state can most likely delay those deficits until 2025 ‑26. (We list the Governor ’s budget discretionary spending proposals that do not help the state meet its SAL requirements in our post The 2022‑23 Budget: Initial Comments on the State Appropriations Limit Proposal .
https://lao.ca.gov/Publications/Report/4583

The 2023-24 Budget: California's Fiscal Outlook

Nov 16, 2022 - The negative blue bars early in the period correspond with small shortfalls. Reserve withdrawals, however, reduce the shortfall in 2023 ‑24 and eliminate it entirely in the following two years. (Proposition  2 [2014] created a reserve for schools and community colleges and established rules requiring deposits into and withdrawals from the fund under certain conditions.)
https://lao.ca.gov/Publications/Report/4646

The 2023-24 California Spending Plan: Other Provisions

Nov 8, 2023 - Chapter 53 of 2023 (SB 124, Committee on Budget and Fiscal Review) Green Bank Financing. Authorizes I ‑Bank to spend future federal funding that the state might receive through the Climate Catalyst Revolving Loan Fund program.
https://lao.ca.gov/Publications/Report/4814

The 2021-22 Budget: Overview of the Spending Plan (Final Version)

Oct 27, 2021 - Resources and Environment: Discretionary Spending Proposals in the 2021 ‑11 Budget Package General Fund (In Millions) Environmental justice initiative (Climate resilience package) — Emergency response and preparedness: fire crews — Various wildfire resilience programs (Wildfire resilience package) — Waste reduction and recycling programs (Circular economic package) — Clean vehicle incentive
https://lao.ca.gov/Publications/Report/4448/1

The 2022-23 Budget: Overview of the Governor's Budget

Jan 13, 2022 - Green Energy Technology Credit. The  Governor ’s Office of Business and Economic Development (GO ‑Biz) would allocate tax credits to companies that are developing green energy technologies. Credit recipients would be required to share future profits with the state.
https://lao.ca.gov/Publications/Report/4492