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

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - Revenues increased by nearly 30 percent in 2020-21 and another 20 percent in 2021-22. In the course of allocating the historically large surpluses generated by the revenue surge, General Fund spending increased commensurately.
https://lao.ca.gov/Publications/Report/4762

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

Rethinking California's Reserve Policy

Apr 10, 2025 - For example, between 2020 ‑21 and 2021 ‑22, the formulas reduced the share of excess capital gains that benefit Proposition  2 by $8  billion. Saving All Excess Capital Gains Would Allow the State to Save More Revenue Peaks.
https://lao.ca.gov/Publications/Report/5028

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 State Appropriations Limit

Apr 21, 2021 - For example, the Governor declared a state of emergency related to the Camp wildfire on November 8, 2018, and related to the LNU Lightning Complex and other wildfires burning statewide on August  18, 2020.
https://lao.ca.gov/Publications/Report/4416

The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - Under the breakeven scenario shown above, the Proposition 98 guarantee would decrease, but would remain roughly $8 billion above the cost of existing school and community college programs over the period.
https://lao.ca.gov/Publications/Report/4472

The 2021-22 Budget: Initial Comments on the Governor’s May Revision

May 17, 2021 - For example, the Governor counts $27  billion in constitutionally required spending on schools and community colleges, nearly $8  billion in required reserve deposits, and $3  billion in required debt payments in his calculation of the surplus.
https://lao.ca.gov/Publications/Report/4432

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

Oct 27, 2021 - There are common provisions among all of the agreements that include: Ending Personal Leave Program (PLP) 2020. The agreements ended PLP 2020. As such, employees no longer ( 1) h ave their pay reduced or ( 2) r eceive PLP 2020 l eave each month.
https://lao.ca.gov/Publications/Report/4448

The 2022-23 California Spending Plan: The State Appropriations Limit

Sep 30, 2022 - The Constitution allows refunds of taxes to be excluded from appropriations subject to limit (see: Section 8(a) of Article XIIIB of the California Constitution). As a result, these types of tax refunds are scored as spending rather than revenue reductions.
https://lao.ca.gov/Publications/Report/4631