The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - After accounting for a 5.35 percent statutory cost ‑of ‑living adjustment (COLA), deposits into the Proposition 98 reserve, and various other adjustments, we estimate the Legislature has $9.5 billion in ongoing funds available for allocation in 2022 ‑23.
https://lao.ca.gov/Publications/Report/4472

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - The state solved a $27  billion deficit in 2023 ‑24, a $55  billion deficit in 2024 ‑25, and a $15  billion deficit in 2025 ‑26 (in addition to roughly $28  billion in proactive budget ‑balancing actions taken the year before).
https://lao.ca.gov/Publications/Report/5091

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

Jan 12, 2026 - That said, recent budgets have set the SFEU bet ween $3.5  billion and $4.5  billion, so the Governor ’s budget proposal to set the balance to $4.5  billion is generally in line with recent policy.
https://lao.ca.gov/Publications/Report/5101

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

Nov 17, 2021 - The Legislature could increase funding for the community colleges by providing more unrestricted funding, more restricted funding for specified purposes, or more support directly to students to address living costs.
https://lao.ca.gov/Publications/Report/4473

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

May 17, 2025 - As we discuss later in this brief, the May Revision maintains a cost ‑of ‑living adjustment (COLA) and other spending increases for schools and community colleges despite the drop in funding. Baseline Spending Higher by $12   Billion.
https://lao.ca.gov/Publications/Report/5044

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

Nov 16, 2022 - The 2023-24 Budget: Considering Inflation's Effects on State Programs LAO Comments Summary State Budget Automatically Accounts for Inflation in Some Areas. There are three mechanisms by which state spending is adjusted for inflation: (1)  formulas, in which program spending is statutorily adjusted for certain factors, like a cost of living adjustment (COLA); (2)
https://lao.ca.gov/Publications/Report/4647

The 2023-24 Budget: California's Fiscal Outlook

Nov 16, 2022 - Despite this decrease, the state could afford to maintain its existing school and community college programs and provide a cost ‑of ‑living adjustment (COLA) of up to 8.38  percent in 2023 ‑24. (This COLA represents a slight reduction in the statutory rate that would apply if the Proposition  98 funding requirement were larger.)
https://lao.ca.gov/Publications/Report/4646

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - Inflation Risk Is Really a Revenue Risk Although high inflation often is most associated with rising prices and a higher cost of living, from a state budget perspective, the overriding worry is on the revenue side.
https://lao.ca.gov/Publications/Report/4653

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - The most recent COVID ‑19 induced recession was acute, but short ‑lived. Ultimately, unlike with previous downturns, state revenues did not decline in response. In fact, the immediate aftermath of this recession was marked by robust revenue growth.
https://lao.ca.gov/Publications/Report/4687

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - These challenges would not be short-lived either. 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