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

Feb 20, 2026 - For example, we recommend the Legislature: Do Not Suspend the $3  Billion True Up Into the Budget Stabilization Account (BSA). The Governor ’s budget proposes suspending a roughly $3  billion true-up deposit that otherwise would be required in 2025-26.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - Although the settle‑up proposal responds to revenue risk in the current year, downside risk to revenues is likely greater in 2026‑27 than it is in 2025‑26. Suspends BSA True ‑Up Deposit for 2025 ‑26.
https://lao.ca.gov/Publications/Report/5101

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Second, the Governor proposed suspending a $2.8  billion true-up deposit to the state ’s reserve that otherwise would be required. This proposal helps balance the budget but runs counter to the basic fiscal logic that stronger-than-expected revenues should be used to build reserves.
https://lao.ca.gov/Publications/Report/5104

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - The estimate of the requirement for 2024 ‑25 is up nearly $4.7  billion (4  percent) from the June 2024 level, but the budget appropriates just over $2.7  billion in additional funding for that year.
https://lao.ca.gov/Publications/Report/5079

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

May 17, 2025 - Revenues for prior and current years are up a total of $6  billion, primarily reflecting stronger ‑than ‑expect personal income tax collections which are running $4  billion ahead of prior projections as of April.
https://lao.ca.gov/Publications/Report/5044

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - Revenues Are Unlikely to Grow Fast Enough to Catch Up to Atypically High Spending Growth. While the budget picture is fair for the upcoming year, our outlook suggests that the state faces double ‑digit operating deficits in the years to come.
https://lao.ca.gov/Publications/Report/4939

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

Jan 13, 2025 - Any level above zero is up to the discretion of the Legislature. Recent budgets have set the SFEU between $3.5  billion and $4  billion. The Governor proposes a $4.5  billion SFEU balance for the end of 2025 ‑26.
https://lao.ca.gov/Publications/Report/4951

Rethinking California's Reserve Policy

Apr 10, 2025 - Conversely, revenues can grow quickly in response to economic expansions or run ups in the stock market. …And Core Spending Is Not. Meanwhile, the ongoing costs of state programs —the state ’s core service level —is much steadier.
https://lao.ca.gov/Publications/Report/5028

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - Figure 1 True Up Provisions. Under Proposition  2 ’s “true up ” provisions, the state reevaluates the BSA estimate twice: once in each two subsequent budgets. Under these reevaluations, the state revises the BSA deposit up or down if capital gains taxes were higher or lower than the state ’s prior estimates.
https://lao.ca.gov/Publications/Report/4418

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - In both cases, reserve requirements tend to go up when revenues increase, particularly when capital gains taxes rise, and vice versa. These requirements are automatically adjusted in response to changes in revenue estimates and both reserves have maximum thresholds.
https://lao.ca.gov/Publications/Report/4819