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

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

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - The Fed ’s continued efforts to lower inflation by raising the Fed funds rate has the effect of cooling the economy, which inherently raises the odds of a recession. As a potential precipitating factor to recession, tighter monetary policy can also reveal financial system vulnerabilities.
https://lao.ca.gov/Publications/Report/4762

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - History suggests that this is a daunting task, however, and at least raises the odds of a recession. Financial markets, and the yield curve for U.S. Treasury notes in particular, recently have signaled as much.
https://lao.ca.gov/Publications/Report/4590

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - (Our Fiscal Outlook revenues are our best estimate of the revenue assumption that has even odds of being too high or too low.) We then look at where in this range of potential revenue outcomes the Governor ’s proposed level of spending falls.
https://lao.ca.gov/Publications/Report/4687

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

Nov 17, 2021 - The Legislature could increase funding for the community colleges by providing more unrestricted funding, more restricted funding for specified purposes, or more support directly to students to address living costs.
https://lao.ca.gov/Publications/Report/4473

The 2023-24 Budget: Considering Inflation's Effects on State Programs

Nov 16, 2022 - Cases in which program spending is adjusted by certain factors, like a cost ‑of ‑living adjustment (COLA). These factors are set and approved in state law. These adjustments require limited annual legislative input, particularly when continuously appropriated.
https://lao.ca.gov/Publications/Report/4647

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - Inflation Risk Is Really a Revenue Risk Although high inflation often is most associated with rising prices and a higher cost of living, from a state budget perspective, the overriding worry is on the revenue side.
https://lao.ca.gov/Publications/Report/4653