The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - This Time Might Be Different, but It Is Not Safe to Bet on It. With so much enthusiasm surrounding AI, it now appears time to take seriously the notion that the stock market has become overheated. History suggests that the stock market is prone to overreact to major technological advances, even if the technology itself turns out to be revolutionary.
https://lao.ca.gov/Publications/Report/5091

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

Jan 12, 2026 - That said, recent budgets have set the SFEU bet ween $3.5  billion and $4.5  billion, so the Governor ’s budget proposal to set the balance to $4.5  billion is generally in line with recent policy.
https://lao.ca.gov/Publications/Report/5101

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - 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. In this way, our approach represents a hedge; estimated revenues are not as low as they would be in an outright downturn, nor are they as high as is possible if there is no downturn.
https://lao.ca.gov/Publications/Report/5104

The 2025-26 Budget: California Spending Plan Series [Publication Details]

Oct 16, 2025 - Each year, our office publishes California Spending Plan, a series of publications that summarize the annual state budget. The flagship report of this series, Overview of the Spending Plan, is presented here along with short online posts that focus on major areas and features of the 2025-26 budget package. As the posts become available, we will add them below.
https://lao.ca.gov/Publications/Detail/5105

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - This is important because, going forward, the budget problems will become more difficult to solve. The Legislature likely will need to adopt additional solutions that increase ongoing revenues or reduce ongoing spending —both of which involve the most difficult and consequential trade-offs for policy makers.
https://lao.ca.gov/Publications/Report/5052

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - Overall, this figure shows that the state budget is likely balanced over the next couple of years, but a budget problem becomes more likely in later years.
https://lao.ca.gov/Publications/Report/4907

The 2024-25 Budget: Deficit Update

Feb 20, 2024 - Reducing one-time and temporary spending is a “use or lose ” tool for addressing the budget problem —once the funds are disbursed to recipients, pulling them back becomes practically impossible. Other tools, like reserve withdrawals and cost shifts, also can be used only once, but at any time.
https://lao.ca.gov/Publications/Report/4850

Rethinking California's Reserve Policy

Apr 10, 2025 - (This analysis assumes that, after 2029‑30 when debt payments become optional, the state dedicates all of the Proposition 2 requirements to reserves, rather than splitting those requirements between reserves and debt.)
https://lao.ca.gov/Publications/Report/5028

A Framework for Allocating Federal Recovery Funds

May 4, 2021 - Some policy initiatives that involve upfront infusions of resources or entail costs large enough to be prohibitive in normal times become feasible in light of the federal resources. For example, the Legislature could use a portion of the funds to incentivize employer participation in reforming how the state ’s unemployment insurance benefit program is financed.
https://lao.ca.gov/Publications/Report/4422

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Stock compensation has become an increasingly important form of pay among California ’s high ‑income workers, especially those at major technology companies. In the first half of 2024, stock pay alone at four major technology companies accounted for almost 10  percent of the state ’s total income tax withholding.
https://lao.ca.gov/Publications/Report/4939