The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - If our estimates hold, the Legislature will face a fourth consecutive year of budget problems —all during a period of overall revenue growth . As it stands —with larger forecasted deficits and many fewer tools available to address them —California ’s budget is undeniably less prepared for downturns.
https://lao.ca.gov/Publications/Report/5091

Rethinking California's Reserve Policy

Apr 10, 2025 - For example, in 2018 ‑19, the Legislature created the Budget Deficit Savings Account —which was used to temporarily hold a $2.6  billion optional deposit into the BSA —and the Safety Net Reserve —a reserve specifically dedicated to CalWORKs and Medi ‑Cal.
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Why We Advise Holding Off on Using Reserves for Now. The main benefit of reserves is that they help the state to maintain its core spending over the long term, despite the state ’s volatile revenue structure.
https://lao.ca.gov/Publications/Report/4687

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - When this gap shrinks or inverts, however, it suggests bond investors anticipate that in the future, the Fed will be holding interest rates low due to a weaker economy. As a result, increased yields on short-term Treasury notes, reflecting the Fed ’s efforts to head off inflation, can approach or exceed the yield on longer-term notes.
https://lao.ca.gov/Publications/Report/4590

The 2023-24 Budget: State Appropriations Limit Estimates

Feb 1, 2023 - We still expect this long-term dynamic will hold. In fact, under our estimates of the Governor’s budget revenue projections, room under the limit would decline to nearly zero in the coming years. As such, we continue to expect the SAL to be a long-term budget consideration for the Legislature.
https://lao.ca.gov/Publications/Report/4667

The 2022-23 Budget: Overview of the Spending Plan

Oct 12, 2022 - In addition to the $1.1 billion amount, the spendi ng plan includes $70 million General Fund for a separate program to provide retention payments to eligible workers in health care clinics. Behavioral Health.
https://lao.ca.gov/Publications/Report/4616

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

Apr 19, 2023 - Holding all else equal, if the economy were to enter a recession, it would be better to do so with flush reserves. The decision of whether to draw upon reserves, therefore, hinges on the Legislature’s assessment of the state’s current fiscal structure and economic outlook.
https://lao.ca.gov/Publications/Report/4762

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - Based on deposits the state made in 2020 ‑21 and 2021 ‑22, the Proposition  98 Reserve currently holds a balance of $8.1  billion. (This amount excludes the additional deposits the state had anticipated making in 2022 ‑23 and 2023 ‑24 prior to our lower revenue estimates.)
https://lao.ca.gov/Publications/Report/4819

The 2023-24 Budget: Considering Inflation's Effects on State Programs

Nov 16, 2022 - Ultimately, all changes in state spending are legislative decisions as the Legislature holds the constitutional power of appropriation. That said, in some cases, the legislature has delegated its authority such that some spending changes can be made without specific legislative deliberation.
https://lao.ca.gov/Publications/Report/4647

The 2022-23 Budget: Fiscal Outlook for Schools and Community Colleges

Nov 17, 2021 - Although these reductions eventually could translate into lower SCFF funding levels, the state has several “hold harmless ” provisions to maintain funding in 2022 ‑23. Pension Costs Increasing for School and Community College Districts.
https://lao.ca.gov/Publications/Report/4473