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

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - First, as Harvard economist Jason Furman has pointed out, the U.S. states —including California —are open economies with fixed exchange rates against the rest of the nation. This means that a portion of any inflation created by the tax rebate program will be exported to the rest of the U.S.
https://lao.ca.gov/Publications/Report/4653

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

Oct 27, 2021 - Health: Discretionary Spending Proposals in the 2021 ‑22 Budget Package General Fund (In Millions) Behavioral Health Continuum Infrastructure Program — School behavioral health partnerships and capacity — Children and Youth Behavioral Health Initiative state operations — Behavioral Health Services and Supports Platform — All Children Thrive Program augmentation — Support for Alzheimer ’s Disease
https://lao.ca.gov/Publications/Report/4448/1

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 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 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 2022-23 Budget: Overview of the Governor's Budget

Jan 13, 2022 - The Governor signals a commitment to working with the Legislature and other stakeholders on options to improve affordability and access to health care coverage through California ’s health insurance marketplace, known as the California Health Benefit Exchange (Covered California).
https://lao.ca.gov/Publications/Report/4492