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 - 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

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 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

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 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 2022-23 Budget: Overview of the Spending Plan

Oct 12, 2022 - These funds supplement existing funds from Proposition 51, the state school bond approved by voters in 2016. (Funding from Proposition 51 will likely be exhausted in 2022‑23.) The remaining $100 million is for schools to construct or renovate State Preschool, transitional kindergarten, and full‑day kindergarten classrooms.
https://lao.ca.gov/Publications/Report/4616

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - In particular, the Legislature deposited an additional $2  billion into the BSA in 2016-17 and an additional $2.6  billion in 2018-19. However, a portion of these deposits ultimately were used to fund required true ups.
https://lao.ca.gov/Publications/Report/4418

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

Oct 27, 2021 - These funds supplement existing funds from Proposition 51, the state school bond approved by voters in 2016. Control Sections 19.56 and 19.57. Two budget control sections provide a total of $1. 2 b illion for a variety of augmentations, across a number of program areas, for various legislative priorities.
https://lao.ca.gov/Publications/Report/4448