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 2025-26 Budget: California Spending Plan Series [Publication Details]

Oct 16, 2025 - The 2025-26 Budget: California Spending Plan Series [Publication Details] Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only.
https://lao.ca.gov/Publications/Detail/5105

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 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

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

Feb 20, 2026 - At the same time, the state would continue to use $10  billion in reserves in 2025-26 under the administration ’s plan. 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).
https://lao.ca.gov/Publications/Report/5133

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 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - As shown in Figure  2, the 2025 ‑26 spending plan includes nearly $10  billion in new borrowing, increasing total outstanding budgetary borrowing from $12  billion to  $22  billion. Figure 2 The State ’s New Wall of Debt (In Billions)
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Similarly, the number of Californians who are unemployed is 25  percent higher than during the strong labor markets of 2019 and 2022. Consumer spending (measured by inflation ‑adjusted retail sales and taxable sales) has continued to decline throughout  2024.
https://lao.ca.gov/Publications/Report/4939

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

Jan 12, 2026 - 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). In the coming weeks, we will analyze the plan in more detail and release many additional issue ‑specific budget analyses.
https://lao.ca.gov/Publications/Report/5101

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