The 2026-27 Budget: Overview of the Spending Plan

Aug 26, 2026 - Major Features Tax Policy Extends Limitations on Business Tax Credits. Two years ago, the state temporarily increased corporation tax revenues by limiting the amount of tax credits a business can claim to $5  million for tax years 2024, 2025, and 2026.
https://lao.ca.gov/Publications/Report/5197

Understanding The State’s Astonishing Cash Position

Sep 16, 2026 - However, a severe and unprecedented late ‑arriving decline in income tax revenues occurred at the same time, with collections down 25  percent. Unfortunately, due to a federal and corresponding state change in tax filing deadlines, the state only gained a complete picture of 2022 ‑23 tax collections late in 2023, well after the fiscal year had ended.
https://lao.ca.gov/Publications/Report/5198

The 2026-27 Budget: Overview of the Spending Plan

Aug 26, 2026 - CDCR = California Department of Corrections and Rehabilitation; FTB = Franchise Tax Board; UIS = unsatisfactory immigration status; Preschool = State Preschool; CDCR = California Department of Corrections and Rehabilitation; DOJ = Department of Justice; and IHSS = In ‑Home Supportive Services.
https://lao.ca.gov/Publications/Report/5197/2

The 2026-27 Budget: Initial Comments on the Governor's May Revision

May 18, 2026 - APS = Adult Protective Services; CDTFA = California Department of Tax and Fee Administration; CSAC = California Student Aid Commission; DOJ  =  Department of Justice; HBEX = California Health Benefit Exchange; HCD = Department of Housing and Community Development; IHSS = In ‑Home Supportive Services; and UIS = unsatisfactory immigration status Appendix 2, Figure 3 General Fund Spending Solutions (Reversions) Proposed in the 2026 ‑27 May Revision (In Millions)
https://lao.ca.gov/Publications/Report/5187/2

Understanding $100 Billion in Spending Growth: Causes and Fiscal Implications

Apr 28, 2026 - Closing Remaining Gap With Tax Increases Would Require Significant Action. Closing the remaining gap through revenue increases would require major tax actions. Our office recently published a report outlining various options the state has to raise or lower taxes (see Comparing Options to Raise and Lower Taxes ).
https://lao.ca.gov/Publications/Report/5176

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

Feb 20, 2026 - The 2026-27 Budget: How to Use One-Time Revenue Improvements The 2026-27 Budget How to Use One-Time Revenue Improvements Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook , we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse.
https://lao.ca.gov/Publications/Report/5133

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - As we described in our November Fiscal Outlook , the recent stronger-than-expected revenue trends are almost entirely explained by the personal income tax (PIT), which has seen double digit growth this year.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - Consistent with these trends, collections from the sales tax and corporation tax (adjusted for recent policy changes) have posted below ‑average growth in recent months. Income Tax, Fueled by Exuberance Over Artificial Intelligence (AI), Remains Lone Bright Spot.
https://lao.ca.gov/Publications/Report/5091

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

Jan 12, 2026 - Should a stock market downturn occur, income tax revenues would fall considerably. These risks are severe enough that not incorporating them into this year ’s budget, as the Governor proposes, would put the state on precarious footing.
https://lao.ca.gov/Publications/Report/5101

The 2026-27 Budget: How to Use One-Time Revenue Improvements [Publication Details]

Feb 20, 2026 - Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook, we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse. Further, the state faces significant structural deficits in the future.
https://lao.ca.gov/Publications/Detail/5133