New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - The abrupt reversal of inflation ’s decades-long trend of subsiding puts the Legislature in unfamiliar economic territory for budgeting and policymaking. As we prepared our fiscal outlook for the upcoming 2023-24 budget cycle, our office forecasted that heightened inflation will continue to be part of the economic backdrop.
https://lao.ca.gov/Publications/Report/4653

The Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - There are also some properties that appear to meet the de finition, although perhaps less clearly, like information technology projects. Does the State Need to Own the Asset to Count It as an Exclusion?
https://lao.ca.gov/Publications/Report/4547

Flexible Funding to California in the American Rescue Plan

Mar 23, 2021 - The funds will be distributed to states, tribes, and territories based on a formula that considers the state ’s share of the nation ’s unemployment. We estimate California ’s state government will receive about $26  billion of this total, although this number will change slightly depending on the specific unemployment estimates used in the calculation.
https://lao.ca.gov/Publications/Report/4407

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - For example, two major proposals raise concerns for our office: the suspension of net operating loss (NOL) de ductions and unallocated state operations reductions. Finally, given that our revenue forecast is somewhat below the administration ’s forecast, we would suggest the Legislature consider whether or not it is comfortable with this downside risk to the state ’s budget picture.
https://lao.ca.gov/Publications/Report/4902

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - As displayed in Figure  1, this spread briefly fell into negative territory in early April 2022, from 1.29  percentage points on October 8, 2021. While a temporary yield curve inversion alone is hardly a comprehensive basis on which to make state fiscal policy, its occurrence is cautionary.
https://lao.ca.gov/Publications/Report/4590

Overview of American Rescue Plan: Implications for California [Publication Details]

Mar 18, 2021 - Presented to: Assembly Subcommittee No. 6 on Budget Process, Oversight and Program Evaluation Hon. Philip Y. Ting, Chair
https://lao.ca.gov/Publications/Detail/4405

Rethinking California's Reserve Policy

Apr 10, 2025 - Asset market downturns, like stock market drops or real estate slumps, can also reduce capital gains tax revenue and other investment ‑related income, lowering state revenue. Conversely, revenues can grow quickly in response to economic expansions or run ups in the stock market.
https://lao.ca.gov/Publications/Report/5028

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - As a result of this statute, the state regularl y contributes a percentage of pay above what is actuarially required and established by the CalPERS Board. In 2024 ‑25, the state ’s supplemental payment under this section ranges from 0.1  percent of pay for Miscellaneous employees to 1.65  percent of pay for employees in the Peace Officer and Firefighter pension and is expected to total less than $100  million General Fund.
https://lao.ca.gov/Publications/Report/4887

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

Nov 16, 2022 - Fewer staff means higher caseloads, which can result in adverse impacts to program timeliness and accuracy, particularl y for redeterminations and case management. In another similar example, regional centers —which provide services to consumers with developmental disabilities —are funded by the state with a core staffing formula that largely has been frozen since 1991.
https://lao.ca.gov/Publications/Report/4647

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

Jan 10, 2021 - These include: $750  Million to Strengthen County “Behavioral Health Continuum. ” As described earlier, the Governor proposes $750  million General Fund —made available over three years —for competitive grants to counties to purchase or renovate real estate for behavioral health facilities.
https://lao.ca.gov/Publications/Report/4309