Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - As displayed in Figure  1, this spread briefly fell into negative territory in early April 2022, from 1.29  percentage points on October 8, 2021. While a temporary yield curve inversion alone is hardly a comprehensive basis on which to make state fiscal policy, its occurrence is cautionary.
https://lao.ca.gov/Publications/Report/4590

Rethinking California's Reserve Policy

Apr 10, 2025 - For example, between 2020 ‑21 and 2021 ‑22, the formulas reduced the share of excess capital gains that benefit Proposition  2 by $8  billion. Saving All Excess Capital Gains Would Allow the State to Save More Revenue Peaks.
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 - Holding all else equal, if the economy were to enter a recession, it would be better to do so with flush reserves. The decision of whether to draw upon reserves, therefore, hinges on the Legislature’s assessment of the state’s current fiscal structure and economic outlook.
https://lao.ca.gov/Publications/Report/4762

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - If our estimates hold, the Legislature will face a fourth consecutive year of budget problems —all during a period of overall revenue growth . As it stands —with larger forecasted deficits and many fewer tools available to address them —California ’s budget is undeniably less prepared for downturns.
https://lao.ca.gov/Publications/Report/5091

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - Update (10/2/24): Figure 8 has been updated for final actions.
https://lao.ca.gov/Publications/Report/4922/3

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - Update (10/2/24): Figure 8 has been updated for final actions.
https://lao.ca.gov/Publications/Report/4922/2

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - Update (10/2/24): Figure 8 has been updated for final actions.
https://lao.ca.gov/Publications/Report/4922/1

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Why We Advise Holding Off on Using Reserves for Now. The main benefit of reserves is that they help the state to maintain its core spending over the long term, despite the state ’s volatile revenue structure.
https://lao.ca.gov/Publications/Report/4687

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - Based on deposits the state made in 2020 ‑21 and 2021 ‑22, the Proposition  98 Reserve currently holds a balance of $8.1  billion. (This amount excludes the additional deposits the state had anticipated making in 2022 ‑23 and 2023 ‑24 prior to our lower revenue estimates.)
https://lao.ca.gov/Publications/Report/4819

The 2023-24 Budget: State Appropriations Limit Estimates

Feb 1, 2023 - We still expect this long-term dynamic will hold. In fact, under our estimates of the Governor’s budget revenue projections, room under the limit would decline to nearly zero in the coming years. As such, we continue to expect the SAL to be a long-term budget consideration for the Legislature.
https://lao.ca.gov/Publications/Report/4667