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

Feb 20, 2026 - Make a Smaller Withdrawal From the BSA. The Governor ’s budget also maintains a $7  billion withdrawal from the BSA in 2025-26. If a May Revision windfall exceeds the amount needed to fund the true up, we recommend the Legislature use those resources to reduce the size of this withdrawal.
https://lao.ca.gov/Publications/Report/5133

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

Jan 12, 2026 - This includes proposals to: (1)  remove the state ’s share of costs associated with growth in IHSS hours per case, which we estimate could save $650  million by 2029 ‑30 (if hours continue to grow at their current rates); (2)  make an ongoing reduction to the Middle Class Scholarship program, which generates $541  million in savings beginning in 2027 ‑28; and (3)  make $12  million in previously provided ongoing federal ‑related litigation funding limited term.
https://lao.ca.gov/Publications/Report/5101

The 2026-27 Budget: How to Use One-Time Revenue Improvements [Publication Details]

Feb 20, 2026 - Recent stock market performance continues to boost income tax collections. In our Fiscal Outlook, we strongly advised the Legislature to treat near-term strength in tax collections as temporary because we expect these gains to reverse. Further, the state faces significant structural deficits in the future.
https://lao.ca.gov/Publications/Detail/5133

Revenue Volatility and California’s Reserve Policy [Publication Details]

Feb 18, 2026 - Senate Committee on Budget and Fiscal Review
https://lao.ca.gov/Publications/Detail/5125

California’s Strong Revenue Trends Mask Looming Budget Risk [Publication Details]

Jan 23, 2026 - In this installment of Fiscal Perspectives, the Legislative Analyst describes how the LAO’s revenue estimates represent a hedge against downside stock market risk and why—despite current cash trends—caution matters given the state’s large, ongoing structural deficit.
https://lao.ca.gov/Publications/Detail/5104

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - In this installment of Fiscal Perspectives, the Legislative Analyst describes how the LAO’s revenue estimates represent a hedge against downside stock market risk and why—despite current cash trends—caution matters given the state’s large, ongoing structural deficit.
https://lao.ca.gov/Publications/Report/5104

Senate Handout: Overview of the Governor’s Budget [Publication Details]

Jan 21, 2026 - Senate Budget and Fiscal Review
https://lao.ca.gov/Publications/Detail/5103

Assembly Handout: Overview of the Governor’s Budget [Publication Details]

Jan 20, 2026 - Assembly Committee on Budget
https://lao.ca.gov/Publications/Detail/5102

The 2026-27 Budget: Overview of the Governor's Budget [Publication Details]

Jan 12, 2026 - On January 9, 2026, Governor Newsom’s administration presented its proposed state budget to the California Legislature. In this report, we provide a high-level summary and our initial analysis of the Governor’s budget based on our preliminary review (as of January 10). Assembly Budget Handout (PDF) Senate Budget and Fiscal Review Handout (PDF)
https://lao.ca.gov/Publications/Detail/5101

The 2026-27 Budget [Publication Details]

Jan 1, 2026 - As we release publications aimed at addressing the 2026-27 budget situation, we will add them to this index page.
https://lao.ca.gov/Publications/Detail/5107