The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - The 2026-27 Budget: California's Fiscal Outlook Executive Summary Not Safe to Bet Artificial Intelligence ( AI) Fueled Exuberance Is Sustainable. Both the California and U.S. economies currently face significant headwinds.
https://lao.ca.gov/Publications/Report/5091

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - First, what is the main channel through which high inflation affects the state’s budget condition? Second, how exposed is the state’s cost structure to the effects of high inflation? The broader concerns related to inflation also give rise to an important question from the opposite direction: Should the Legislature consider whether its policy choices will influence the level or direction of inflation in the economy?
https://lao.ca.gov/Publications/Report/4653

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

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

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 - As a result, there are three general mechanisms for these spending adjustments, all of which require different levels of legislative input. Formulaic Adjustments. Cases in which program spending is adjusted by certain factors, like a cost ‑of ‑living adjustment (COLA).
https://lao.ca.gov/Publications/Report/4647

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

Nov 17, 2021 - To address high living costs for students, the state could increase ongoing funding for financial aid (such as by augmenting funding for the Student Success Completion Grant, which supports eligible low ‑income students attending college full time) or provide one ‑time or ongoing funds to support food and housing insecure students.
https://lao.ca.gov/Publications/Report/4473

The 2022-23 Budget: Multiyear Budget Outlook

May 24, 2022 - Our office ’s expenditure estimates account for inflation when cost ‑of ‑living adjustments are required by law and in areas where the state typically provides these adjustments, for example, in employee compensation.
https://lao.ca.gov/Publications/Report/4602

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

Jan 10, 2021 - Conclusion The pandemic has disrupted the lives and livelihoods of millions of Californians and continues to take the lives of thousands of Californians each month. In the spring of 2020, the Legislature faced an unprecedented challenge to respond to the pandemic and adopt a budget in the face of unprecedented economic uncertainty.
https://lao.ca.gov/Publications/Report/4309

Rethinking California's Reserve Policy

Apr 10, 2025 - A person saving for retirement does not know how long they will live or exactly what their expenses will be in retirement, but they nonetheless must plan for this eventuality by making the best possible choices in the meantime.
https://lao.ca.gov/Publications/Report/5028