California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - These firms have invested heavily in building out data centers and on extraordinary pay packages for their key employees. This spending, along with gains to investors, has turbo-charged state income tax receipts.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - Borrowing costs, a key factor in business expansions and major consumer purchases, remain high. New tariffs on imports into the U.S. are creating cost pressures for businesses and consumers. Despite this, income tax collections have been strong in recent months, growing at double‑digit rates.
https://lao.ca.gov/Publications/Report/5091

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - Understanding the extent to which programs are achieving the desired outcomes requires identifying what the key program goals are, assessing whether programs are well scoped to achieve those goals, and whether the key program objectives are being met.
https://lao.ca.gov/Publications/Report/4983

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

May 17, 2025 - This budget problem is driven by two key factors: higher baseline spending, most notably in Medi‑Cal, and lower revenues, reflecting diminished expectations for both the personal income tax and the corporation tax.
https://lao.ca.gov/Publications/Report/5044

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Second, we briefly summarize the key actions taken to address projected out ‑year deficits, and describe the administration ’s June  2025 estimates of the state ’s multiyear budget condition under the enacted spending plan.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - Two key areas where these savings have eroded are in the managed care organization (MCO) tax package and reductions to state operations. These are described in the box below. The forthcoming Appendix 1 will also provide a full list of the solutions from the 2024 ‑25 budget package that generate savings in 2025 ‑26.
https://lao.ca.gov/Publications/Report/4951

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - Establishing Baseline Expenditure Estimates: a Key Step in Fiscal Planning When developing our fall fiscal outlook for the state, we begin by estimating the expenditure baseline. This reflects the projected cost of maintaining current state government programs and services under existing laws and policies, before considering the fiscal effects of any new policy decisions.
https://lao.ca.gov/Publications/Report/4938

Rethinking California's Reserve Policy

Apr 10, 2025 - However, in general, growth in core services tracks more stable factors, like inflation (especially inflation for pharmaceuticals and health care) and population (especially in some key demographic areas).
https://lao.ca.gov/Publications/Report/5028

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

Apr 19, 2023 - Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4762

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - The 2024-25 Budget: Multiyear Budget Outlook Multiyear Budget Outlook Key Takeaways Modest Operating Deficits Persist Through the Multiyear. 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