Rethinking California's Reserve Policy

Apr 10, 2025 - In this report, when revenues are insufficient for the state to pay for its core service level, we describe the difference as a funding shortfall. A funding shortfall is distinct from a budget deficit, which occurs when revenues are insufficient for the state to pay for all of its currently authorized services (not just core services).
https://lao.ca.gov/Publications/Report/5028

The 2025-26 Budget: California's Fiscal Outlook

Nov 20, 2024 - This is not a prediction of what will happen —state and federal laws and policies will change in the coming years —but rather serves as a baseline to help the Legislature understand its starting place.
https://lao.ca.gov/Publications/Report/4939

The 2025-26 Budget: Undertaking Fiscal Oversight

Feb 24, 2025 - However, proactive efforts to help improve the amount of information that is available could help the Legislature gain sufficient insight so as to determine which programs to prioritize over others. Are Programs Providing Expected Benefits?
https://lao.ca.gov/Publications/Report/4983

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - While this action could help address the multiyear deficits that both our office and Department of Finance project for the coming years, it would not (1)  help the state address the significant budget problem the state faces in 2024 ‑25 or (2)  pay down unfunded liabilities faster than otherwise would be the case.
https://lao.ca.gov/Publications/Report/4887

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

Nov 15, 2024 - Some have asked why this is the case and whether aligning LAO and DOF estimates would be helpful to the Legislature. Although aligning revenue estimates might reduce the potential for confusion, doing so would risk creating bigger problems.
https://lao.ca.gov/Publications/Report/4938

The 2025-26 Budget: Undertaking Fiscal Oversight [Publication Details]

Feb 24, 2025 - This post provides guidance to the Legislature for conducting fiscal oversight. As outlined in our November Fiscal Outlook, we advise the Legislature to use the 2025-26 budget process to conduct robust fiscal oversight of state programs.
https://lao.ca.gov/Publications/Detail/4983

The 2023-24 California Spending Plan: Other Provisions

Nov 8, 2023 - Although the state and employees contribute money to prefund retiree health benefits earned today, the state pays for current retirees ’ health benefits on a pay-as-you-go basis. This pay-as-you-go cost grows each year as health premiums rise and the number of retired state workers grows.
https://lao.ca.gov/Publications/Report/4814

The 2022-23 Budget: State Appropriations Limit Implications

Mar 30, 2022 - The scenario shown in Figure  5 assumes the state saves $10  billion in 2022 ‑23 and then uses those funds to pay for SAL requirements in 2023 ‑24 and/or 2024 ‑25. As such, the nearly $10  billion in funds available as a result of rejecting these proposals must be saved to help balance the budget in the future.
https://lao.ca.gov/Publications/Report/4583

The 2025-26 Budget: California's Fiscal Outlook [Publication Details]

Nov 20, 2024 - Every year, our office publishes the Fiscal Outlook in anticipation of the upcoming budget season. This report gives the Legislature our independent estimates and analysis of the state’s budget condition with the goal of helping lawmakers prepare for the 2025-26 budget process. See our other Fiscal Outlook publications here.
https://lao.ca.gov/Publications/Detail/4939

The 2024-25 Budget: Overview of the Spending Plan

Sep 6, 2024 - To help address the budget problem, the spending plan makes a number of changes to one ‑time and temporary funding that was agreed to in previous budgets for climate, resources, and environmental programs.
https://lao.ca.gov/Publications/Report/4922