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 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

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Accordingly, we have adopted terminology that more transparently reflects the underlying natur e of these budget solutions, if not always their precise  mechanics.) Major categories of borrowing in the budget  include: Medi ‑Cal Maneuver ($4.4   Billion).
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - Some of this borrowing is similar to the measures used during the Great Recession —collectively previously referred to as the state ’s “wall of debt, ” which was defined as nonroutine borrowing mechanisms enacted to address persistent deficits.
https://lao.ca.gov/Publications/Report/5052

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

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - The Legislature has varying degrees of fiscal flexibility, depending on the program. Typically, restrictions on the Legislature ’s flexibility are imposed by the voters, courts, or the federal government.
https://lao.ca.gov/Publications/Report/4983

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

Apr 19, 2023 - Other downturns, such as the 2001 so-called dot-com recession, had severe fiscal implications while inflicting somewhat milder economic damage. The 2008 Great Recession had brutal effects on both the state ’s economy and budget.
https://lao.ca.gov/Publications/Report/4762