California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Given that this deficit is estimated to range from $20  billion to $35  billion in the years ahead, addressing it gradually, rather than all at once, reduces fiscal disruption and more readily provides for legislative input and flexibility.
https://lao.ca.gov/Publications/Report/5104

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

Jan 12, 2026 - Both our office and the administration expect the state to face multiyear deficits, with estimates ranging from $20  billion to $35  billion annually. These deficits are concerning for three reasons.
https://lao.ca.gov/Publications/Report/5101