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

Jan 12, 2026 - First, after four years of projected deficits and a cumulative total of $125  billion in budget problems solved so far, the state ’s negative fiscal situation is now chronic. Second, structural deficits have grown —our November outlook is the most negative forecast of the budget ’s position since the pandemic.
https://lao.ca.gov/Publications/Report/5101

How Have Past Stock Market Downturns Affected Income Tax Revenue? [EconTax Blog]

Mar 9, 2026 - Once the stock market drops, revenue growth   first slows, then stalls, then turns negative. The dot-com example below illustrates this pattern. In practice, this means the state could see continued but weakened revenue growth for some time after a correction before the outlook turns clearly negative.
https://lao.ca.gov/LAOEconTax/Article/Detail/852

How Have Past Stock Market Downturns Affected Income Tax Revenue? [EconTax Blog]

Mar 9, 2026 - Once the stock market drops, revenue growth   first slows, then stalls, then turns negative. The dot-com example below illustrates this pattern. In practice, this means the state could see continued but weakened revenue growth for some time after a correction before the outlook turns clearly negative.
https://lao.ca.gov/LAOEconTax/article/Detail/852

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

California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - The Internet obviously has been a transformative innovation for society and the economy, but early on, financial markets valued dot-com and Internet firms above what their revenue-generating capacity warranted at the time.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: Cap-and-Invest Expenditure Plan [Publication Details]

Feb 10, 2026 - In this report, we review the Governor’s proposed plan for spending cap-and-invest revenues in 2026-27.
https://lao.ca.gov/Publications/Detail/5114

The 2026-27 Budget: Cap-and-Invest Expenditure Plan

Feb 10, 2026 - In light of this, we think the Legislature should carefully consider what types of activities it would like to include in this category —and potentially provide this guidance to the administration in statute, as appropriate —recognizing that this year ’s decisions could serve as a precedent going forward.
https://lao.ca.gov/Publications/Report/5114

Implementing California’s Child Welfare Prevention Services Program

Jan 28, 2026 - The Legislature could work with the administration to understand what options exist to pursue expansion of the federal clearinghouse to include such programs. Consider What Data Legislature Would Want for Future Evaluation.
https://lao.ca.gov/Publications/Report/5106

Assessing a Shift to Enrollment-Based School Funding

Jan 6, 2026 - In addition, the Legislature could require LEAs to offer absent students access to additional instructional support outside of t he school day, similar to what they might currently receive through attendance recovery programs.
https://lao.ca.gov/Publications/Report/5100

The 2026-27 Budget: Governor’s Sustainable Aviation Fuel Tax Credit Proposal

Feb 24, 2026 - Reducing Diesel Excise Tax Revenues Would Negatively Impact Transportation Programs. While the size of the revenue losses from the Governor ’s proposed tax credit is somewhat uncertain, they have the potential for negative impacts on transportation programs.
https://lao.ca.gov/Publications/Report/5139