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

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

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

The 2023-24 Budget: Initial Comments on the Governor's May Revision

May 15, 2023 - The May Revision also includes a proposal to delay providing ongoing General Fund for financial assistance to Covered California enrollees, freeing up $304 million. About one‑third of the Governor’s spending solutions are reductions. $3.7   Billion in Reductions Subject to Trigger Reduction.
https://lao.ca.gov/Publications/Report/4769

The 2022-23 Budget: Fiscal Outlook for Schools and Community Colleges

Nov 17, 2021 - These allocations expire in 2022 ‑23, freeing ‑up the underlying funds. An additional $1.8  billion is available from reductions in costs due to lower attendance. Regarding cost increases, we account for previous commitments, the required reserve deposit, and the 5.35 percent COLA.
https://lao.ca.gov/Publications/Report/4473

The 2023-24 Budget: California's Fiscal Outlook

Nov 16, 2022 - On the one hand, pausing automatic adjustments could free up resources and mitigate the need for other reductions. On the other hand, for those programs whose costs have not recently been adjusted for inflation, budget reductions would result in greater reductions in service.
https://lao.ca.gov/Publications/Report/4646

The 2021-22 Budget: Overview of the Spending Plan (Final Version)

Oct 27, 2021 - Hospital — Provides bridge funding for medically tailored meals — Provides accelerated enrollment for adult enrollees — Authorizes community health workers to provide Medi ‑Cal benefits — Establishes Medication Therapy Management program — Adds infant whole genome sequencing as a benefit — Support for free and charitable clinics — Ends rate reduction for complex rehabilitation
https://lao.ca.gov/Publications/Report/4448/1

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

Nov 16, 2022 - In other cases, pausing automatic adjustments could free up resources and mitigate the need for reductions. If the Legislature wants to provide new inflation adjus tments in some areas in response to higher prices, the size of the budget problem will increase, meaning corresponding reductions to other areas also would be required.
https://lao.ca.gov/Publications/Report/4647