Rethinking California's Reserve Policy

Apr 10, 2025 - According to this measure, California has one of the most volatile tax revenue systems in the country, ranking fifth out of 50 states. However, using data from the Fiscal Survey of States put together by the National Association of State Budget Officers, California ’s rainy day fund balances are somewhat below average.
https://lao.ca.gov/Publications/Report/5028

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - This year, for example, our outlook reflects our best estimates of the effects of H.R. 1: One Big Beautiful Bill Act on the state budget but does not make assumptions about future federal policy changes.
https://lao.ca.gov/Publications/Report/5091

Rethinking California's Reserve Policy [Publication Details]

Apr 10, 2025 - Reserves allow the state to ensure stable funding for its services over time, even when revenue fluctuates unpredictably. Over the last few years, the state has indeed experienced significant fluctuations—large surpluses followed by significant deficits. This volatility has prompted interest in changes to the state’s reserve policy.
https://lao.ca.gov/Publications/Detail/5028

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

The 2023-24 California Spending Plan: Other Provisions

Nov 8, 2023 - The budget package also removes the cap preventing a grantee from receiving more than 30  percent of the program ’s total grants if the grant will be used as a state match to apply for federal incentives for semiconductor research and manufacturing.
https://lao.ca.gov/Publications/Report/4814

The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - This means General Fund costs will increase by this amount, but the Legislature also will have these ARP funds to allocate to one of the federally allowable purposes in 2022 ‑23. (For more information, see: The 2021‑22 Spending Plan: Major New Control Sections in the Spending Plan ) Enhanced Federal Match for Medicaid.
https://lao.ca.gov/Publications/Report/4472

The 2023-24 Budget: Initial Comments on the Governor's May Revision

May 15, 2023 - (In this figure and throughout the report, some of the estimates cited here for the Governor ’s budget might not match estimates provided in our Overview of the Governor ’s Budget , published in January.
https://lao.ca.gov/Publications/Report/4769

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Importantly, these budget solutions also included a planned withdrawal from the state ’s rainy ‑day fund, the Budget Stabilization Account (BSA), of $7.1  billion. The June 2025 spending plan maintains these actions, including the reserve withdrawal.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - These choices included about $11  billion in spending ‑related solutions and $15  billion in all other solutions, including $5.5  billion in temporary revenue increases and a $7  billion withdrawal from the state ’s rainy ‑day fund .
https://lao.ca.gov/Publications/Report/4939

The 2024-25 Budget: Multiyear Budget Outlook

May 23, 2024 - While these estimates assume the state uses a portion of the rainy-day fund in 2025 ‑26, as planned under the May Revision, there would be more reserves available to cover the additional budget problem in 2025 ‑26 and 2026 ‑27.
https://lao.ca.gov/Publications/Report/4907