California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The current discrepancy over the size of the state ’s budget deficit —$18  billion under the Legislative Analyst ’s Office estimate versus $3  billion in the Governor ’s budget —fits squarely within that pattern.
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

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

Jan 12, 2026 - Governor’s Budget Roughly Balanced on Higher Revenues In November, We Anticipated the State Faced an $18   Billion Deficit. In our November Fiscal Outlook report, we estimated that the state faced an $18  billion budget problem.
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 - 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

The 2023-24 Budget: Overview of the Governor's Budget

Jan 13, 2023 - We Estimate the Governor Solved an $18   Billion Budget Problem. We estimate the Governor ’s budget addressed an $18  billion budget problem. This is somewhat lower than the $22  billion budget problem the administration has referenced.
https://lao.ca.gov/Publications/Report/4662

The 2023-24 Budget: Multiyear Budget Outlook

May 23, 2023 - Operating Deficits Average $18   Billion Annually Under LAO Estimates. Figure  1 shows our office ’s projections of the state ’s budget condition compared to the administration ’s estimates. As the figure shows, both of our offices project the state will have operating deficits (budget problems) over the multiyear period.
https://lao.ca.gov/Publications/Report/4772

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 State Appropriations Limit

Apr 21, 2021 - The state ’s appropriations subject to the limit fell substantially during the dot ‑com bust in the early 2000s and again during the Great Recession due to the significant decline in state revenues during those downturns.
https://lao.ca.gov/Publications/Report/4416

The 2023-24 Budget: Overview of the Spending Plan (Final Version)

Oct 16, 2023 - Appendix 4, Figure 7 Remaining Large One ‑Time and Temporary Augmentations From the 2021 ‑22 and 2022 ‑23 Budget Packages: Resources and Environment General Fund (In Millions) Emergency surge (helitanker contract component) $45 Clean Energy Reliability Investment Plan (SB 846) 100 Diablo Canyon land use planning — Coastal resilience SB 1 implementation 55 Clean Cars 4 All and other equity (ZEV
https://lao.ca.gov/Publications/Report/4788/4