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 - 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 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 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 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 2022-23 Budget: Multiyear Budget Outlook

May 24, 2022 - Another key way to address future SAL requirements, or a budget problem resulting from a recession, would be to increase reserves this year. The state has a $52  billion surplus —now is the time to prepare for these looming budget problems.
https://lao.ca.gov/Publications/Report/4602

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