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

Apr 26, 2021 - (We provide additional background and detail on the remaining eligible uses of Proposition  2 here .) Figure 4 Outstanding State ‑Only Eligible Uses of Proposition 2 (In Billions)
https://lao.ca.gov/Publications/Report/4418

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - Originally, eligible debts under Proposition  2 included both budgetary debts and retirement liabilities. However, the state repaid all of the outstanding eligible budgetary debts in 2019 ‑20. The remaining eligible uses of Proposition  2 debt payments are related to prefunding state retiree health benefits and unfunded liabilities associated with state ‑level pension plans.
https://lao.ca.gov/Publications/Report/4887

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 State Appropriations Limit

Apr 21, 2021 - Proposition  2 (201 4) r equired the state to set aside more funds in reserves. Under Proposition  4, reserve deposits are counted in the year they are made (instead of the year they are withdrawn). While Proposition   2 r equires the state to set aside minimum amounts in reserve each year, Proposition   4 l
https://lao.ca.gov/Publications/Report/4416

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

Rethinking California's Reserve Policy

Apr 10, 2025 - While the state neared this cap in the 2019 ‑20 budget, the cap has only been operative twice: in 2022 ‑23 and 2023 ‑24. All  told, had there not been a cap on constitutional deposits, the state would have deposited about $2  billion more in reserves.
https://lao.ca.gov/Publications/Report/5028

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 2022-23 Budget: Initial Comments on the Governor's May Revision

May 16, 2022 - As Figure  2 shows, the state ’s general ‑purpose reserves increased steadily after 2014 ‑15, when Proposition  2 was passed by voters. In  2019 ‑20, the state made its first withdrawal from the BSA  under the rules of Proposition  2 and the balance declined substantially.
https://lao.ca.gov/Publications/Report/4598

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - In particular, the Legislature could consider: (1)  suspending deposits into the state ’s rainy ‑day fund (although this would require action by the Governor); (2)  reducing more one ‑time and temporary  spending; (3)  shifting more costs than currently proposed by the Governor; and/or (4)  increasing revenues, for example, on a temporary basis.
https://lao.ca.gov/Publications/Report/4687

The 2021-22 Budget: Initial Comments on the Governor’s May Revision

May 17, 2021 - Major Spending Choices Figure  2 displays the major budgetary decisions that the Governor made in allocating state and federal money, totaling $85  billion. It includes (1)  the General Fund surplus, (2)  school and community college spending, (3)  the American Rescue Plan (ARP) fiscal relief funds, and (4)  ARP capital projects funds.
https://lao.ca.gov/Publications/Report/4432