California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The added risk variable weighs on the range of revenue outcomes that we view as most plausible. The middle of the range, which becomes our main revenue forecast, is thus lower than if we did not include the stock market risk indicator.
https://lao.ca.gov/Publications/Report/5104

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

Jan 12, 2026 - Several historically reliable signs suggest the stock market is overheated and at high risk of reversing course into a downturn in the next year or so. Should a stock market downturn occur, income tax revenues would fall considerably.
https://lao.ca.gov/Publications/Report/5101

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - During the special session, the Legislature added Control Sections 90.00 and 90.01 to the 2024 ‑25 Budget Act providing up to $2.5  billion one ‑time for response and recovery costs related to the January 2025 Southern California wildfires.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - As inflation has eased, the Federal Reserve recently has reversed course. Should inflation remain subdued and the Federal Reserve continue down its path toward looser money, California ’s economy could be lifted.
https://lao.ca.gov/Publications/Report/4939

The 2021-22 California Spending Plan: The State Appropriations Limit

Aug 30, 2021 - The 2021-22 California Spending Plan: The State Appropriations Limit The 2021-22 California Spending Plan The State Appropriations Limit In the late 1970s, voters passed Proposition  4 (1979), which added Article XIIIB to the State Constitution.
https://lao.ca.gov/Publications/Report/4449

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - As such, our independent fiscal assessment underlies the Legislature ’s ability to assert an informed check on the executive branch, making any added complexity from diverging estimates a worthwhile trade-off.
https://lao.ca.gov/Publications/Report/4938

Rethinking California's Reserve Policy

Apr 10, 2025 - Predicting the exact path revenues will take over the next 50  years is, of course, impossible. However, we can make informed estimates about the future with tools similar those used in insurance markets and the state ’s pension system.
https://lao.ca.gov/Publications/Report/5028

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

May 17, 2025 - Finally, although we have not previously recommended the Leg islature take decisive action to address the structural deficits, the state ’s persistent fiscal imbalance and the added downside risks —particularly from potential federal actions —suggest a need for a more proactive approach.
https://lao.ca.gov/Publications/Report/5044

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - These funds will be transferred back to the SPIF for costs associated with the Capitol Annex Project over the course of 2024-25 ($300  million), 2025-26 ($250  million), and 2026-27 ($150  million). Contracting.
https://lao.ca.gov/Publications/Report/4934

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - These funds will be transferred back to the SPIF for costs associated with the Capitol Annex Project over the course of 2024-25 ($300  million), 2025-26 ($250  million), and 2026-27 ($150  million). Contracting.
https://lao.ca.gov/Publications/Report/4934/governors-office-of-emergency-services