California’s Strong Revenue Trends Mask Looming Budget Risk

Jan 23, 2026 - Throughout the mid-to-late 1990s, the stock market boomed over optimism around the Internet and dot-com start-ups. Strong tax revenue trends from this boom generated large budget surpluses that ultimately gave way to serious deficits once the bubble burst and PIT revenues declined nearly 30  percent.
https://lao.ca.gov/Publications/Report/5104

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - Consumers also continue to report historically low optimism about the economy ’s future. Consistent with these trends, collections from the sales tax and corporation tax (adjusted for recent policy changes) have posted below ‑average growth in recent months.
https://lao.ca.gov/Publications/Report/5091

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 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - The recent run ‑up in the stock market, which appears tied to optimism surrounding artificial intelligence, is a primary driver of the rapid growth in pay to high ‑income workers. Stock compensation has become an increasingly important form of pay among California ’s high ‑income workers, especially those at major technology companies.
https://lao.ca.gov/Publications/Report/4939

California's Legislative Analyst's Office and the Value of Independence

Nov 15, 2024 - California's Legislative Analyst's Office and the Value of Independence Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4938

Rethinking California's Reserve Policy

Apr 10, 2025 - In March of 2004, on the heels of the dot ‑com bust, voters passed Proposition  58, which created the Budget Stabilization Account (BSA). In the 2006 ‑07 budget, the Legislature deposited $472  million into the BSA and in 2007 ‑08 deposited $1.5  billion.
https://lao.ca.gov/Publications/Report/5028

The 2023-24 Budget: Multiyear Assessment

Feb 15, 2023 - Three of those —the recession in the early 1990s, the dot ‑com bust in the early 2000s, and the Great Recession —resulted in large revenue shortfalls and ensuing multiyear deficits, even for some years after each recession ended.
https://lao.ca.gov/Publications/Report/4687

New Inflation Poses Not So New Budget Risk

Dec 15, 2022 - New Inflation Poses Not So New Budget Risk Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California. New Inflation Poses Not So New Budget Risk December 15, 2022 Tweet Gabriel PetekLegislative Analyst Persistent high inflation presents federal and state policymakers with an economic problem not seen in roughly four decades.
https://lao.ca.gov/Publications/Report/4653

Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential

May 27, 2021 - Despite Fiscal Forecasting Uncertainties, Multiyear Budget Planning Essential Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4443

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - Strong Tax Collections Belie California's Challenging Fiscal Outlook Search In Fiscal Perspectives , the Legislative Analyst periodically offers the Legislature his views on fiscal matters facing California.
https://lao.ca.gov/Publications/Report/4590