Understanding $100 Billion in Spending Growth: Causes and Fiscal Implications

Apr 28, 2026 - For example, this could include doing all of the following: (1) raising personal income tax rates by 6 percent (not percentage points) across the board, (2) increasing the corporate tax by 6 percentage points, and (3) raising the sales tax by one cent.
https://lao.ca.gov/Publications/Report/5176

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - California consumers similarly are limiting spending, with sales of taxable goods flat over the last year. Consumers also continue to report historically low optimism about the economy ’s future. Consistent with these trends, collections from the sales tax and corporation tax (adjusted for recent policy changes) have posted below ‑average growth in recent months.
https://lao.ca.gov/Publications/Report/5091

The 2026-27 Budget: Initial Comments on the Governor's May Revision

May 18, 2026 - APS = Adult Protective Services; CDTFA = California Department of Tax and Fee Administration; CSAC = California Student Aid Commission; DOJ  =  Department of Justice; HBEX = California Health Benefit Exchange; HCD = Department of Housing and Community Development; IHSS = In ‑Home Supportive Services; and UIS = unsatisfactory immigration status Appendix 2, Figure 3 General Fund Spending Solutions (Reversions) Proposed in the 2026 ‑27 May Revision (In Millions)
https://lao.ca.gov/Publications/Report/5187/2

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Consumer spending (measured by inflation ‑adjusted retail sales and taxable sales) has continued to decline throughout  2024. …And Yet Incomes Are Growing Rapidly for High ‑Income Californians. Alongside these downbeat trends, a bright spot has emerged: strong growth in total pay to California workers.
https://lao.ca.gov/Publications/Report/4939

The 2026-27 Budget: How to Use One-Time Revenue Improvements

Feb 20, 2026 - The 2026-27 Budget: How to Use One-Time Revenue Improvements The 2026-27 Budget How to Use One-Time Revenue Improvements Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook , we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse.
https://lao.ca.gov/Publications/Report/5133

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - As we described in our November Fiscal Outlook , the recent stronger-than-expected revenue trends are almost entirely explained by the personal income tax (PIT), which has seen double digit growth this year.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: How to Use One-Time Revenue Improvements [Publication Details]

Feb 20, 2026 - Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook, we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse. Further, the state faces significant structural deficits in the future.
https://lao.ca.gov/Publications/Detail/5133

Rethinking California's Reserve Policy

Apr 10, 2025 - Proposition  4 sets up a system in which all tax revenues —with only limited exceptions —are counted at some level of government (for example, the state, or a city, county, or school district). Funds transferred between these entities of government are counted at some part of the structure.
https://lao.ca.gov/Publications/Report/5028

The 2026-27 Budget: Overview of the Governor's Budget

Jan 12, 2026 - Should a stock market downturn occur, income tax revenues would fall considerably. These risks are severe enough that not incorporating them into this year ’s budget, as the Governor proposes, would put the state on precarious footing.
https://lao.ca.gov/Publications/Report/5101

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

Jan 10, 2021 - Sales Tax Exemption. $100  million for sales tax exclusions awarded by the California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) on purchases of equipment for certain manufacturing activities.
https://lao.ca.gov/Publications/Report/4309