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 - Moreover, we estimate costs in other programs to be about $6  billion higher than anticipated. Starting in 2027 ‑28, we estimate structural deficits to grow to about $35  billion annually due to spending growth continuing to outstrip revenue growth.
https://lao.ca.gov/Publications/Report/5091

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - After accounting for proposed budget solutions, the administration estimates the state has $15.2  billion in one ‑time or temporary spending scheduled for 2023 ‑24, $9.3  billion in 2024 ‑25, and $6  billion in 2025 ‑26.
https://lao.ca.gov/Publications/Report/4687

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

Jan 12, 2026 - Taken together, the budget solutions in the Governor ’s budget result in an improvement in the budget ’s bottom line by $9  billion. Ongoing, the Governor ’s spending ‑related solutions provide $5  billion in savings within a few years.
https://lao.ca.gov/Publications/Report/5101

The 2026-27 Budget: How to Use One-Time Revenue Improvements

Feb 20, 2026 - In addition, recent budgets have relied on nearly $30  billion in borrowing to address deficits, and the Governor ’s budget proposes almost $6  billion in additional borrowing (see Figure  1). A period of strong revenue growth is not an appropriate time to draw down significant reserves or continue to rely on borrowing.
https://lao.ca.gov/Publications/Report/5133

The 2026-27 Budget: Overview of the Governor's Budget [Publication Details]

Jan 12, 2026 - On January 9, 2026, Governor Newsom’s administration presented its proposed state budget to the California Legislature. In this report, we provide a high-level summary and our initial analysis of the Governor’s budget based on our preliminary review (as of January 10). Assembly Budget Handout (PDF) Senate Budget and Fiscal Review Handout (PDF)
https://lao.ca.gov/Publications/Detail/5101

Rethinking California's Reserve Policy

Apr 10, 2025 - This change alone would improve upon the Governor’s proposal considerably—under our benchmark scenario, the state would be able to cover two‑thirds of funding shortfalls across 50 years, rather than only half (see Figure 9).
https://lao.ca.gov/Publications/Report/5028

The State Appropriations Limit

Apr 21, 2021 - The state ’s appropriations subject to the limit fell substantially during the dot ‑com bust in the early 2000s and again during the Great Recession due to the significant decline in state revenues during those downturns.
https://lao.ca.gov/Publications/Report/4416

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

Oct 27, 2021 - In particular, the budget package provides $6. 9 b illion General Fund (a total of $12. 7 b illion over four years) for seven major “packages ” that each include funding for multiple programs and projects.
https://lao.ca.gov/Publications/Report/4448