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 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - The 2026-27 Budget: California's Fiscal Outlook Executive Summary Not Safe to Bet Artificial Intelligence ( AI) Fueled Exuberance Is Sustainable. Both the California and U.S. economies currently face significant headwinds.
https://lao.ca.gov/Publications/Report/5091

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - One path is falling interest rates and expansion of money available for lending and investment. A key driver of California ’s economic slump over the last two years has been the Federal Reserve ’s efforts to tamp down inflation by raising interest rates and shrinking how much money is available for lending and investment.
https://lao.ca.gov/Publications/Report/4939

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Employer Contributions for “Unfunded Liabilities. ” An unfunded liability means that the projected value of pension benefits earned to date exceeds the projected assets of the pension system. While the state shares normal cost with employees, unfunded liabilities generally are the state ’s responsibility.
https://lao.ca.gov/Publications/Report/4887

Flexible Funding to California in the American Rescue Plan

Mar 23, 2021 - How Will the Money Be Allocated? Federal funds anticipated at the time of budget enactment are appropriated just like any other state revenue source. This means the Legislature will need to approve a plan for spending these funds in the 2021-22 Budget Act .
https://lao.ca.gov/Publications/Report/4407

The 2022-23 Budget: Initial Comments on the State Appropriations Limit Proposal

Feb 4, 2022 - There are many options for tax reductions, including: broad ‑based rebates, targeted rebates, and expansions of tax credits and programs like the Earned Income Tax Credit. Compared to waiting to address excess revenues, this option would afford the state more flexibility in designing the reductions.
https://lao.ca.gov/Publications/Report/4515

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

Jan 13, 2025 - The reason for the reduction is the recent voter approval of Proposition  35 (2024), which requires the state to spend less MCO tax money on offsetting General Fund spending and more money on provider rate increases.
https://lao.ca.gov/Publications/Report/4951

Rethinking California's Reserve Policy

Apr 10, 2025 - Functionally, borrowing has the same impact as reserves —it moves money from a period when state revenues are surging to one when they fall short —but generally involves higher interest costs for the state.
https://lao.ca.gov/Publications/Report/5028

The 2022-23 Budget: California’s Fiscal Outlook

Nov 17, 2021 - Several major firms have posted historically high earnings. Consistent with this recent trend, under our main forecast, we estimate tax revenues (and transfers) are higher by nearly $28 billion across 2020‑21 and 2021‑22 compared to budget act estimates.
https://lao.ca.gov/Publications/Report/4472

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - And most of this increase has come from skyrocketing share prices among a handful of firms associated with innovations in Artificial Intelligence (AI). These firms have invested heavily in building out data centers and on extraordinary pay packages for their key employees.
https://lao.ca.gov/Publications/Report/5104