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

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

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - While the Governor focuses solutions in Medi-Cal —constituting $11  billion of the total $16  billion in solutions —the Legislature could pursue a different mix of spending and/or revenue solutions than those proposed.
https://lao.ca.gov/Publications/Report/5052

The 2024-25 Budget: Deficit Update

Feb 20, 2024 - State Has Nearly $16  Billion in Recent One-Time and Temporary Spending That Could Possibly Still Be Pulled Back or Reduced. After setting aside disbursements and Governor ’s budget proposals, we estimate the state possibly could pull back and reduce one-time and temporary augmentations by as much as $6.4  billion in 2023 ‑24, $4.1  billion in 2024 ‑25, and $5.1  billion in 2025 ‑26.
https://lao.ca.gov/Publications/Report/4850

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

May 17, 2024 - Of this total, $22  billion are related to school and community college funding changes and $16  billion are spending reductions, while the remaining solutions comprise other types, like fund shifts.
https://lao.ca.gov/Publications/Report/4902

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

May 17, 2021 - The Governor ’s May Revision estimates the state will collect $16  billion in revenues in excess of the SAL this year. However, the ultimate amount of a potential excess will depend on decisions by the Legislature.
https://lao.ca.gov/Publications/Report/4432

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

Jan 13, 2025 - The  June 2024 budget package committed to a total of $28  billion in budget solutions for 2025 ‑26, which included, $12  billion in spending ‑related solutions and nearly $16  billion in all other solutions, including $5.5  billion in temporary revenue increases and a $7  billion withdrawal from the state ’s rainy day fund, the Budget Stabilization Account (BSA).
https://lao.ca.gov/Publications/Report/4951

Flexible Funding to California in the American Rescue Plan

Mar 23, 2021 - .) $16  Billion in Fiscal Relief Funding to Local Governments. Cities and counties will receive fiscal recovery funds based on a set of formulas that considers the jurisdiction ’s population, among other factors.
https://lao.ca.gov/Publications/Report/4407

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

Jan 13, 2025 - Update (1/16/25): A set of tables detailing various solutions and proposals has been appended to the online version of this report. They are available using the HTML link above. On January 10, 2025, Governor Newsom’s administration presented its proposed state budget to the California Legislature.
https://lao.ca.gov/Publications/Report/4951/3