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

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 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Three of those —the recession in the early 1990s, the dot ‑com bust in the early 2000s, and the Great Recession —resulted in large revenue shortfalls and ensuing multiyear deficits, even for some years after each recession ended.
https://lao.ca.gov/Publications/Report/4687

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

The Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - As such, Government Code Section 7914 defines qualified capital outlay as: “an appropriation for a fixed asset (including land and construction) with a useful life of 10 or more years and a value which equals or exceeds one hundred thousand dollars ($100,000). ” Because this statute is fairly broad, often there are questions about how it should be interpreted in certain cases.
https://lao.ca.gov/Publications/Report/4547

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Under Section 20683.2 of the Government Code pertaining to CalPERS, any savings that otherwise would have been realized by the state employer as a result of employees contributing more towards their pensions is, instead, directed towards paying down the unfunded liabilities.
https://lao.ca.gov/Publications/Report/4887

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

Nov 16, 2022 - Government Code allows the State Public Works Board to augment the costs of major capital outlay projects by up to 20 percent with legislative notification. Larger augmentations require legislative approval.
https://lao.ca.gov/Publications/Report/4647

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

Sep 30, 2022 - This year ’s budget built on these changes to expand the definition of subvention also to include a variety of other specific streams of funds, as listed in Government Code 7903. Under Chapter  48 of 2022 (SB  189, Committee on Budget and Fiscal Review), subventions now include, for example, funds to counties for the administration of health and human services programs like
https://lao.ca.gov/Publications/Report/4631

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