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

Nov 16, 2022 - There is significant variation in the use of these mechanisms across the budget, such that some areas of the budget automatically account for inflation, but many others do not. Overall, a large share of state spending is adju sted to some degree formulaically or administratively (notably in K ‑12 education and many health payments), however, a large number of programs are not.
https://lao.ca.gov/Publications/Report/4647

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - University Payment Deferrals ($274 Million). The budget defers University of California (UC) and California State University (CSU) payments that otherwise would have been made in May to June or July.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - Meanwhile, growth in programs like the universities and child care see little change, as they were not subject to major ongoing reduction proposals in the May Revision. New and Existing Budgetary Borrowing Increase Out-Year Budget Problems.
https://lao.ca.gov/Publications/Report/5052

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

Jan 12, 2026 - Some of the largest spending augmentations proposed for the budget window include: (1) $76 million for utility replacement and site improvements at Exposition Park, (2) $67 million to the California Department of Forestry and Fire Protection for fixed‑wing aircraft pilot and mechanics contract increases, (3) $60 million to the Department of Health Care Access and Information for
https://lao.ca.gov/Publications/Report/5101

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

Apr 19, 2023 - In his 2021 book, The Resilient Society , Princeton University economist Markus Brunnermeier argues that for governments, being frugal in good times is what provides extra spending capacity —resilience —in bad times.
https://lao.ca.gov/Publications/Report/4762

The 2021-22 Budget: Overview of the Governor's Budget

Jan 10, 2021 - Universities Governor Proposes Ongoing Base Increases Linked With Certain Expectations. The Governor proposes a total of $336  million in additional ongoing funding for the California State University (CSU) and the University of California (UC).
https://lao.ca.gov/Publications/Report/4309

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - Inevitably, our estimates will differ to some degree from those prepared by the Department of Finance (DOF) and included in the Governor ’s budget, released each year in January. Such differences reflect in part the differing roles of our office —serving the Legislature —and the Department of Finance —serving the Governor.
https://lao.ca.gov/Publications/Report/4938