The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - These companies have made big bets on AI, spending hundreds of billions of dollars on data centers and offering extraordinary pay packages to recruit AI researchers. This spending, coupled with sizable gains to investors and tech company employees via stock options, is boosting state income tax receipts.
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 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - How Do You Focus Your Efforts? The Legislature cannot reasonably undertake in-depth oversight of all state programs in one budget season. As such, the Legislature must determine how to focus its efforts so as to provide information that would be most helpful in making future budget decisions.
https://lao.ca.gov/Publications/Report/4983

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - To do this, we add a stock market indicator to our forecast models alongside other the economic variables. The added risk variable weighs on the range of revenue outcomes that we view as most plausible.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: How to Use One-Time Revenue Improvements

Feb 20, 2026 - For example, we recommend the Legislature: Do Not Suspend the $3  Billion True Up Into the Budget Stabilization Account (BSA). The Governor ’s budget proposes suspending a roughly $3  billion true-up deposit that otherwise would be required in 2025-26.
https://lao.ca.gov/Publications/Report/5133

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

Nov 16, 2022 - We do not think that all —or even more —programs should have automatic adjustments or more statutory authority for administrative discretion. Doing so would reduce the Legislature ’s discretion over state spending.
https://lao.ca.gov/Publications/Report/4647

The Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - However, we would not consider purchases of equipment or personal property that do not improve the underlying asset excludable. Such purchases include, for example, furniture and computers. Similarly, we would not consider operations costs (that do not improve an asset) as excludable.
https://lao.ca.gov/Publications/Report/4547

Rethinking California's Reserve Policy

Apr 10, 2025 - Yet we do not view these recommendations as overly cautious —to arrive at these estimates, we have used standard tools from actuaries in pensions and insurance markets. Rather, we view these figures as an honest reflection of the volatility in the state ’s tax system.
https://lao.ca.gov/Publications/Report/5028

The 2021-22 Budget: Overview of the Governor's Budget

Jan 10, 2021 - The state has two avenues available to do so: Constitutional Requirements. The administration ’s interpretation and assumptions result in large constitutionally required reserve deposits and debt repayments.
https://lao.ca.gov/Publications/Report/4309

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - When cost changes do not occur automatically under current policy, we classify them as either budget solutions or discretionary augmentations. Budget Package Addressed a Nearly $15   Billion Budget Problem.
https://lao.ca.gov/Publications/Report/5079