The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The added risk variable weighs on the range of revenue outcomes that we view as most plausible. The middle of the range, which becomes our main revenue forecast, is thus lower than if we did not include the stock market risk indicator.
https://lao.ca.gov/Publications/Report/5104

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - Although aligning revenue estimates might reduce the potential for confusion, doing so would risk creating bigger problems. In particular, it could provide a false sense of certainty about the state ’s fiscal position.
https://lao.ca.gov/Publications/Report/4938

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

Jan 12, 2026 - Budget Solutions Budget solutions are proposals that create more budget capacity. Taken together, the budget solutions in the Governor ’s budget result in an improvement in the budget ’s bottom line by $9  billion.
https://lao.ca.gov/Publications/Report/5101

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - New tariffs on imports into the U.S. are creating cost pressures for businesses and consumers. And uncertainty with the federal government appears to be contributing to a general anxiety about the economy.
https://lao.ca.gov/Publications/Report/5091

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

May 17, 2025 - Finally, although we have not previously recommended the Leg islature take decisive action to address the structural deficits, the state ’s persistent fiscal imbalance and the added downside risks —particularly from potential federal actions —suggest a need for a more proactive approach.
https://lao.ca.gov/Publications/Report/5044

Rethinking California's Reserve Policy

Apr 10, 2025 - In addition to creating new rules for reserve deposits, Proposition  2 created new rules regarding when otherwise ‑required deposits can be suspended and when funds can be withdrawn from the BSA. Specifically, suspensions or withdrawals can only occur if the Governor declares a budget emergency.
https://lao.ca.gov/Publications/Report/5028

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - First, some proposals provide short ‑term budget savings that create more budget capacity. These total $2.2  billion. Second, the Governor ’s budget includes new discretionary proposals that use budget capacity by increasing spending or reducing revenues.
https://lao.ca.gov/Publications/Report/4951

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - While the Legislature can change how funds within Proposition  98 are distributed, funding less than the constitutional minimum in any particular year requires a two-thirds vote and creates a future obligation for more school funding in subsequent budgets.
https://lao.ca.gov/Publications/Report/4983

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Outside of government and health care, the state has added no jobs in a year and a half. Similarly, the number of Californians who are unemployed is 25  percent higher than during the strong labor markets of 2019 and 2022.
https://lao.ca.gov/Publications/Report/4939