The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - What Information Helps to Assess Costs and Benefits? This section describes the type of information the Legislature can gather to try to assess the costs and benefits of state programs. Once program costs and metrics are understood, the Legislature can weigh the benefits relative to the costs.
https://lao.ca.gov/Publications/Report/4983

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 - Borrowing costs, a key factor in business expansions and major consumer purchases, remain high. New tariffs on imports into the U.S. are creating cost pressures for businesses and consumers. Despite this, income tax collections have been strong in recent months, growing at double‑digit rates.
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

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 - Other Costs Also Higher. Across the rest of the budget, the administration’s estimates of baseline costs—that is, the cost of the state’s services under current law and policy—are also higher than our November estimates by a couple billion of dollars.
https://lao.ca.gov/Publications/Report/5101

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

Feb 20, 2026 - Although the state faces significant cost pressures due to reductions in federal funding, using one-time resources to backfill those ongoing reductions would put the state on even worse fiscal footing going forward.
https://lao.ca.gov/Publications/Report/5133

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Like other budget maneuvers, this creates a misalignment between the state’s cash position and its budgetary costs. Notably, this cost shift is intended to continue on an ongoing basis—meaning costs incurred in 2026‑27 would be recognized in 2027‑28, and so on.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - In addition to Medi ‑Cal, the other main driver of increased costs is higher ‑than ‑expected costs in the In ‑Home Supportive Services (IHSS) program, related to both higher caseload and hours per case.
https://lao.ca.gov/Publications/Report/5044