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

Feb 20, 2026 - Although the state faces significant cost pressures due to reductions in federal funding, using one-time resources to backfill those ongoing reductions would put the state on even worse fiscal footing going forward.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - In this report, we offer an alternative approach for the Legislature to take that would put the state on better fiscal footing. Ultimately, this approach includes: adopting LAO revenue estimates, tackling the resulting budget problem, and shrinking multiyear deficits.
https://lao.ca.gov/Publications/Report/5101

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - The May Revision puts the state on better fiscal footing and makes substantial progress toward structural balance. By pulling back substantially on one-time and temporary spending, as well as making some ongoing reductions, the Governor ’s May Revision shrinks the state ’s projected deficits from around $30  billion (our December 2023 estimates) to an average of less than $10  billion (our estimates today).
https://lao.ca.gov/Publications/Report/4907

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

May 17, 2025 - We recommend the Legislature address the budget shortfall with a similar approach that the administration took, namely adopting solutions that primarily put the state on more solid fiscal footing, rather than those that delay or exacerbate future problems.
https://lao.ca.gov/Publications/Report/5044

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Over the coming months, if California ’s labor market and consumers begin to show signs of a broadening recovery, the state ’s fiscal position is likely to be on better footing. It remains to be seen whether this will occur, but there are some conceivable paths toward broader improvements.
https://lao.ca.gov/Publications/Report/4939

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - First, rejecting the spending would constrain growth of the state ’s spending base, putting it on more solid fiscal footing for whatever economic conditions the future holds. Second, by saving the unspent funds, the state would have resources on hand to help fund the expected SAL requirements or, alternatively, cover a recession-driven budget problem.
https://lao.ca.gov/Publications/Report/4590

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - Proposed Budget Structure Puts the State on Better Fiscal Footing. The overall structure of the Governor ’s May Revision improves the fiscal health of the state in a number of ways. First, by proposing the state use less in reserves, the Governor preserves an important tool to address budget problems, which are likely to continue to emerge.
https://lao.ca.gov/Publications/Report/4902

The 2022-23 Budget: Multiyear Budget Outlook

May 24, 2022 - This would ensure the state budget remains on solid footing regardless of possible future changes to the SAL. In contrast to the Governor’s approach, we recommend the Legislature address the state’s constitutional SAL requirements in its budget architecture throughout the multiyear.
https://lao.ca.gov/Publications/Report/4602

The 2023-24 Budget: Initial Comments on the Governor's May Revision

May 15, 2023 - While using some reserves at that time could be reasonable, the Legislature could still face difficult decisions to ensure the budget is on sound fiscal footing in future  years. Introduction On May 12, 2023, Governor Newsom presented a revised state budget proposal to the Legislature.
https://lao.ca.gov/Publications/Report/4769