California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - California’s Strong Revenue Trends Mask Looming Budget Risk Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California. California’s Strong Revenue Trends Mask Looming Budget Risk January 23, 2026 Tweet Gabriel PetekLegislative Analyst History suggests that fiscal risks can build during times when they are easiest to ignore.
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

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

Jan 12, 2026 - In this report, we offer an alternative approach for the Legislature to take that would put the state on better fiscal footing. Ultimately, this approach includes: adopting LAO revenue estimates, tackling the resulting budget problem, and shrinking multiyear deficits.
https://lao.ca.gov/Publications/Report/5101

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

Nov 15, 2024 - California's Legislative Analyst's Office and the Value of Independence Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4938

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

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - Reserves Offer Insurance Against Downside Risk By far, the biggest fiscal threat posed by inflation is its propensity to raise the risk of a recession. The main budget risk of a recession is the likely revenue loss that would accompany it and strain the state ’s ability to fund its commitments.
https://lao.ca.gov/Publications/Report/4653

Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential

May 27, 2021 - Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4443

The State Appropriations Limit

Apr 21, 2021 - The state ’s appropriations subject to the limit fell substantially during the dot ‑com bust in the early 2000s and again during the Great Recession due to the significant decline in state revenues during those downturns.
https://lao.ca.gov/Publications/Report/4416

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - This section offers some questions to determine how to focus those efforts. What Is the Distribution of General Fund Commitments? Figure  1 shows the relative size and expected growth rates of major General Fund programs.
https://lao.ca.gov/Publications/Report/4983