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 - 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

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

May 17, 2025 - The January budget included about $700 million in discretionary spending and revenue reductions. The May Revision retains most January proposals, including the Governor’s plan to expand the film tax credit, and adds new proposals that bring the total to nearly $2 billion—$1.6 billion in spending and around $150 million in revenue reductions.
https://lao.ca.gov/Publications/Report/5044

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 2025-26 Budget: Overview of the Governor's Budget

Jan 13, 2025 - These total roughly $700  million. Finally, the Governor sets the balance of the Special Fund for Economic Uncertainties to $4.5   billion —somewhat higher than the level enacted by recent budgets. Revenue Estimates Reasonable, but Risks Must Be Kept in Focus.
https://lao.ca.gov/Publications/Report/4951

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 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - This includes, for example, $1.6  billion in spending delays for competitive transit grant funds, a sweep of nearly $600  million in unawarded General Child Care slots, and a change in the distribution of funds in the school facilities program that delays nearly $700  million in spending until after 2024-25.
https://lao.ca.gov/Publications/Report/4902

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

May 15, 2023 - New Discretionary Spending of Over $700   Million. We estimate the Governor proposed additional discretionary spending of over $700  million in the May Revision. This adds to the $2.2  billion in discretionary spending proposed in January for a total of $2.9  billion.
https://lao.ca.gov/Publications/Report/4769

The 2024-25 California Spending Plan: Other Provisions

Oct 2, 2024 - The budget shifts $700  million in 2024-25 to the General Fund from the State Project Infrastructure Fund (SPIF), which supports the Capitol Annex Project. 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).
https://lao.ca.gov/Publications/Report/4934