The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - There are three reasons these actions are now critical. First, the budget problem is now larger than anticipated, despite improvements in revenue, and the structural deficits are significant and growing.
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

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Below, we provide a high ‑level summary of these measures. Funding for the January 2025 Southern California Wildfires. During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Should enthusiasm around artificial intelligence prove warranted, stocks could solidify around current high levels. The solidification of this new wealth could encourage Californians to consume more and businesses to hire more  workers. 2025‑26 Budget Roughly Balanced Legislative Action Last Year Addressed Anticipated Budget Problem Proactively.
https://lao.ca.gov/Publications/Report/4939

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - In large part, this is because the Legislature took significant action last year to solve the budget problem anticipated for 2025-26. As a result, absent substantial changes to these estimates, the Legislature does not need to take any major additional actions this year to balance the budget.
https://lao.ca.gov/Publications/Report/4983

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - According to the administration, this growth is largely due to higher ‑than ‑anticipated per ‑enrollee costs, which reflects a range of factors like greater utilization of services, increased prices for medical care, and expanded use of high ‑cost specialty drugs.
https://lao.ca.gov/Publications/Report/5044

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - This deficit is occurring primarily because the state’s June 2022 revenue projections—although reasonable at the time—were too high. The main reason for these lower projections is action by Federal Reserve, which repeatedly increased interest rates with the aim of cooling the economy and, in turn, slowing inflation.
https://lao.ca.gov/Publications/Report/4687

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - At  a high level, this legislation will require the reporting of additional performance measures, ongoing monitoring by the Department of Housing and Community Development, and increased reporting requirements for all recipients.
https://lao.ca.gov/Publications/Report/4922

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

Feb 20, 2026 - Alternatively, or in combination with the above actions, the Legislature could use windfall resources to repay budgetary borrowing undertaken in recent budgets. Although the state faces significant cost pressures due to reductions in federal funding, using one-time resources to backfill those ongoing reductions would put the state on even worse fiscal footing going forward.
https://lao.ca.gov/Publications/Report/5133

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - Now at 40-year highs, the Federal Reserve (the Fed) has embarked on a cycle of tightening monetary policy intended to cool inflation. Put more plainly, the Fed is attempting to reduce inflation by orchestrating an intentional slowdown in economic growth.
https://lao.ca.gov/Publications/Report/4590