The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - Most of these gains come from the meteoric rise in the value of a handful of tech companies that investors believe will be major beneficiaries of recent advances in AI. These companies have made big bets on AI, spending hundreds of billions of dollars on data centers and offering extraordinary pay packages to recruit AI researchers.
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 - And most of this increase has come from skyrocketing share prices among a handful of firms associated with innovations in Artificial Intelligence (AI). These firms have invested heavily in building out data centers and on extraordinary pay packages for their key employees.
https://lao.ca.gov/Publications/Report/5104

Rethinking California's Reserve Policy

Apr 10, 2025 - On one hand, its progressivity means that the highest tax rates apply to the parts of the state ’s income distribution that grow the fastest. But, on the other hand, that progressive rate structure results in more revenue volatility, which has clear drawbacks.
https://lao.ca.gov/Publications/Report/5028

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

Apr 19, 2023 - On the one hand, reserves offer an expedient solution to the problem. At $27  billion, the state ’s discretionary reserve balances are roughly equivalent to the size of the deficit as estimated in January.
https://lao.ca.gov/Publications/Report/4762

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

Jan 13, 2025 - There are a handful of differences in our estimates, but these changes are small enough on net that they do not substantively change our assessment of the budget condition. Specifically, the administration has higher revenue estimates than our office, but these are mostly offset by their higher spending estimates.
https://lao.ca.gov/Publications/Report/4951

The 2023-24 Budget: California's Fiscal Outlook

Nov 16, 2022 - On the one hand, pausing automatic adjustments could free up resources and mitigate the need for other reductions. On the other hand, for those programs whose costs have not recently been adjusted for inflation, budget reductions would result in greater reductions in service.
https://lao.ca.gov/Publications/Report/4646

The 2022-23 Budget: Initial Comments on the State Appropriations Limit Proposal

Feb 4, 2022 - Regardless of which approach the Legislature decides to pursue, given the complexity of this budget situation, the high likelihood SAL requirements will increase, and the difficult trade ‑offs at hand, we recommend the Legislature make a plan for how it wishes to approach potential requirements in May.
https://lao.ca.gov/Publications/Report/4515

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - The budget package also includes $94 million in one‑time General Fund for flood prevention activities, $65 million in one‑time GGRF for projects at the Salton Sea, and roughly $45 million in ongoing General Fund to make recent temporary expansions of CalFire hand crews permanent.
https://lao.ca.gov/Publications/Report/4922

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - Second, by saving the unspent funds, the state would have resources on hand to help fund the expected SAL requirements or, alternatively, cover a recession-driven budget problem. This action also could be paired with other steps to mitigate the constraints of the SAL, which we lay out in our brief.
https://lao.ca.gov/Publications/Report/4590