California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The added risk variable weighs on the range of revenue outcomes that we view as most plausible. The middle of the range, which becomes our main revenue forecast, is thus lower than if we did not include the stock market risk indicator.
https://lao.ca.gov/Publications/Report/5104

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

Nov 15, 2024 - The added complexity from the alternative revenue estimates making this possible is a worthwhile price to pay. Reaffirming the LAO ’s Independent Mandate The LAO was established in 1941 because the Legislature sought an independent source of information and analysis —one directly accountable to it and serving as a fiscal watchdog on its behalf.
https://lao.ca.gov/Publications/Report/4938

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Because this form of compensation is tied to the company ’s stock price, it rises when stock prices rise. Other forms of pay, such as bonuses to workers in the financial sector, also tend to rise when financial markets are doing well.
https://lao.ca.gov/Publications/Report/4939

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - According to the administration, this growth is largely due to higher ‑than ‑anticipated per ‑enrollee costs, which reflects a range of factors like greater utilization of services, increased prices for medical care, and expanded use of high ‑cost specialty drugs.
https://lao.ca.gov/Publications/Report/5044

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - These factors weigh on the value of riskier assets, like home and stock prices. Historically, the reduction in spending by consumers and businesses resulting from higher interest rates is effective at easing the upward pressure on wages and prices.
https://lao.ca.gov/Publications/Report/4653

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

Nov 16, 2022 - In some areas, the unpredictability of inflation —swings in the rate of growth of prices —can pose greater issues. If inflation is high, but stable, contractors and developers can plan for it and account for growth in prices in projections.
https://lao.ca.gov/Publications/Report/4647

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - The state calculates the statutory COLA each year based on a price index published by the federal government. For 2024 ‑25, the budget provides $1  billion to cover a 1.07  percent COLA for existing school and community college programs.
https://lao.ca.gov/Publications/Report/4922

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - Specifically, it would allow DGS to enter into competitively bid, fixed price, indefinite quantity contracts for certain public works. This could reduce the number of separate contracts DGS uses to procure services, such as roofing, painting, or plumbing.
https://lao.ca.gov/Publications/Report/4934

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - Specifically, it would allow DGS to enter into competitively bid, fixed price, indefinite quantity contracts for certain public works. This could reduce the number of separate contracts DGS uses to procure services, such as roofing, painting, or plumbing.
https://lao.ca.gov/Publications/Report/4934/governors-office-of-emergency-services