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 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - The stock market (S &P 500) has risen 50  percent in the last two years. Most of these gains come from the meteoric rise in the value of a handful of tech companies that investors believe will be major beneficiaries of recent advances in AI.
https://lao.ca.gov/Publications/Report/5091

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 addition, 65 p ercent of funding in 2021 ‑ 22 i s federal, while 35 p ercent is state funding. Some of the major uses of housing and homelessness funding in the budget would support the Homekey Program ’s acquisition of properties for use as permanent housing, provide flexible aid to local governments to address homelessness in their communities, provide
https://lao.ca.gov/Publications/Report/4448

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 2022-23 Budget: Fiscal Outlook for Schools and Community Colleges

Nov 17, 2021 - Accelerate Expanded Learning Opportunities Program (ELO ‑P). The state created ELO ‑P in the 2021 ‑22 budget to fund before/after school programs and summer programs for students in Transitional Kindergarten through grade 6.
https://lao.ca.gov/Publications/Report/4473

The 2021-22 Budget: The Governor’s Suspension Proposal

Jan 29, 2021 - If the current law suspensions went into effect, the state would reinstate a 7  p ercent reduction to service hours. The nearby box describes some potential legal challenges that could arise if this occurred.
https://lao.ca.gov/Publications/Report/4328

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

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Three of those —the recession in the early 1990s, the dot ‑com bust in the early 2000s, and the Great Recession —resulted in large revenue shortfalls and ensuing multiyear deficits, even for some years after each recession ended.
https://lao.ca.gov/Publications/Report/4687