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

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

Flexible Funding to California in the American Rescue Plan

Mar 23, 2021 - Cities and counties will receive fiscal recovery funds based on a set of formulas that considers the jurisdiction ’s population, among other factors. The federal government will distribute funds directly to all counties and cities with populations greater than 50,000.
https://lao.ca.gov/Publications/Report/4407

The State Appropriations Limit

Apr 21, 2021 - A substantial majority of cities and counties ( 82  p ercent of counties and 70  p ercent of cities) have spending at or below 60  p ercent of their limits. Collectively, counties have nearly $ 100  b illion while cities have $ 55  b illion in collective room under their limits.
https://lao.ca.gov/Publications/Report/4416

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 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - To address the budget problem, the budget also makes several other funding changes: Postpones Infrastructure Funding for the City of Fresno. Last year ’s budget allocated $250  million for public infrastructure investments in the City of Fresno.
https://lao.ca.gov/Publications/Report/4934

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - To address the budget problem, the budget also makes several other funding changes: Postpones Infrastructure Funding for the City of Fresno. Last year ’s budget allocated $250  million for public infrastructure investments in the City of Fresno.
https://lao.ca.gov/Publications/Report/4934/governors-office-of-emergency-services

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 Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - If the homes were scattered throughout a city, however, we think the argument is more tenuous. For this reason, in the case of vehicles, we think a vehicle represents an asset —not a fleet —and so the value of an individual vehicle must exceed $100,000 in order to count as an exclusion.
https://lao.ca.gov/Publications/Report/4547