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 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - The spending plan includes two types of these loans: $550  million in loans allocated to specific funds ($150  million from the Unfair Competition Law Fund and $400  million from the Labor and Workforce Development Fund) and $1.5  billion in unallocated special fund loans, authorized through Control Section 13.40.
https://lao.ca.gov/Publications/Report/5079

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

May 17, 2025 - The  largest component is a $1.5  billion upward revision to the entering fund balance, primarily driven by higher ‑than ‑expected reversions of unspent funds and lower required Proposition  2 (2014) debt payments.
https://lao.ca.gov/Publications/Report/5044

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 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

The 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - These included (1)  a $1.5  billion ($760  million General Fund) reduction through the permanent and ongoing reduction of 10,000 vacant positions and the associated funding and (2)  a reduction to General Fund operating expenditures of $2.2  billion in 2024 ‑25 and $2.8  billion in 2025 ‑26 and ongoing.
https://lao.ca.gov/Publications/Report/4951

The 2022-23 Budget: Overview of the Spending Plan

Oct 12, 2022 - In addition, the spending plan includes $1  billion General Fund in 2022 ‑23 ($1.5  billion General Fund over two years) to establish a state ‑level Behavioral Health Bridge Housing program, which will support the creation of immediate, clinically enhanced housing settings for people experiencing homelessness with serious behavioral health conditions.
https://lao.ca.gov/Publications/Report/4616

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - First, it requires the state to set aside 1.5  percent of total General Fund revenues (we refer to this as the “base amount ”). Second, it requires the state to put aside a portion of capital gains revenues that exceed a specified threshold (this is “excess capital gains ”).
https://lao.ca.gov/Publications/Report/4418

The 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - A small portion of the increase relative to 2023 ‑24 (about $1.5  billion) reflects the continuing expansion of transitional kindergarten in 2024 ‑25 and 2025 ‑26. (The June 2021 budget plan contained an agreement to make all four ‑year olds eligible for transitional kindergarten by 2025 ‑26 and required the state to adjust the Proposition  98 requirement upward for the associated costs.)
https://lao.ca.gov/Publications/Report/4772

The 2021-22 Spending Plan: Other Provisions

Sep 23, 2021 - The demand for the program exceeded funding and the administration estimated that about 180,000 applications would be placed on a waitlist. $1.5  Billion for Additional Small Business Relief Grants. The budget includes $1.5  billion in federal American Recovery Plan Act funds for additional grants.
https://lao.ca.gov/Publications/Report/4452