California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Were the markets to drop considerably, budget problems would be tens of billions of dollars larger, necessitating even deeper cuts and/or tax increases. These challenges would not be short-lived either.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - However, our Fiscal Outlook revenue forecast, shown in Figure  2 , reflects a smaller, temporary upgrade which reverses beginning in 2026 ‑ 27 —resulting in 2026 ‑27 revenues being in line with budget act estimates.
https://lao.ca.gov/Publications/Report/5091

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Figure  1 displays the distribution of most likely revenue outcomes over the multiyear (in grey). As seen in the figure, the revenues required to balance the budget (in red) are considerably above the most likely scenario in all but 2026 ‑27.
https://lao.ca.gov/Publications/Report/4687

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - At the same time, we have estimated that revenues are much more likely to be sufficient to cover the state ’s baseline commitments —which are expenditures stripped of the one-time and temporary allocations.
https://lao.ca.gov/Publications/Report/4762

The State Appropriations Limit

Apr 21, 2021 - This means funding for some existing state priorities, like more spending on housing, likely would qualify. As with other options, however, pursuing more spending on excluded purposes over the long term might need to be paired with other budgetary changes, such as reductions to existing services due to cost growth.
https://lao.ca.gov/Publications/Report/4416

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

Jan 12, 2026 - First, the budget includes about ten budget solutions —proposals that create budget capacity, improving the budget ’s bottom line —and they total around $9  billion. Second, the Governor ’s budget includes about 60 discretionary spending proposals —proposals that use budget capacity, eroding the budget ’s bottom line —and these total about $600  million.
https://lao.ca.gov/Publications/Report/5101

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - Fundamentally, our assessment and that of the administration are very similar —the state is likely to face persistent future deficits. These deficits range from $10  billion to $20  billion through 2028-29.
https://lao.ca.gov/Publications/Report/5052

The 2024-25 Budget: California's Fiscal Outlook

Dec 7, 2023 - Proposition 2 This Year, Most Declines in BSA ‑Related Requirements Do Not Impact Budget ’s Bottom Line. Typically, drops in revenue would result in lower BSA and infrastructure requirements. Under our estimates, the state ’s required payments on infrastructure decline by billions of dollars, but because of the way these payments are scored, these changes have no impact on the budget ’s bottom line.
https://lao.ca.gov/Publications/Report/4819

The 2024-25 Budget: Deficit Update

Feb 20, 2024 - Options to Address $15  Billion in Additional Budget Problem If the budget problem increases by $15  billion, the Legislature will need to find a like amount of new budget solutions to ensure the budget is balanced for 2024 ‑25.
https://lao.ca.gov/Publications/Report/4850

The Definition of Qualified Capital Outlay for the State Appropriations Limit

Feb 18, 2022 - There are also some properties that appear to meet the de finition, although perhaps less clearly, like information technology projects. Does the State Need to Own the Asset to Count It as an Exclusion?
https://lao.ca.gov/Publications/Report/4547