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 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 2022-23 Budget: Multiyear Budget Outlook

May 24, 2022 - In contrast to the Governor’s approach, we recommend the Legislature address the state’s constitutional SAL requirements in its budget architecture throughout the multiyear. Additional Reserves Would Mitigate SAL and Recession ‑Induced Budget Problems.
https://lao.ca.gov/Publications/Report/4602

The 2022-23 Budget: Initial Comments on the State Appropriations Limit Proposal

Feb 4, 2022 - Although the Legislature does not need to finalize its budget now, determining the architecture of its preferred approach will increase its flexibility.   Subscribe | California State Legislature | Online Voter Registration | Privacy Policy | Accessibility Legislative Analyst's Office | The California Legislature's Nonpartisan Fiscal and Policy Advisor 925 L Street, Suite 1000 Sacramento, CA 95814 | (916) 445-4656
https://lao.ca.gov/Publications/Report/4515

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

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

The 2022-23 California Spending Plan: The State Appropriations Limit

Sep 30, 2022 - Over the past few years, the state appropriations limit (SAL) has become a major feature in budget architecture and constraint on the Legislature ’s use of surplus funds. For more information about the history of the appropriations limit, and an analysis of why the SAL is impacting budget decisions today, see our previous reports, here: The State Appropriations Limit .
https://lao.ca.gov/Publications/Report/4631

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

Nov 16, 2022 - Key factors contributing to the current uncertainty include the degree to which businesses and workers begin to expect heightened inflation in future years, the degree to which actions by the Federal R eserve to reduce inflation are successful, and changes in geopolitical events affecting food and energy prices.
https://lao.ca.gov/Publications/Report/4647