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

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 2025-26 Budget: California Spending Plan Series [Publication Details]

Oct 16, 2025 - Each year, our office publishes California Spending Plan, a series of publications that summarize the annual state budget. The flagship report of this series, Overview of the Spending Plan, is presented here along with short online posts that focus on major areas and features of the 2025-26 budget package. As the posts become available, we will add them below.
https://lao.ca.gov/Publications/Detail/5105

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: California's Fiscal Outlook

Nov 19, 2025 - 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/5091

Whether or Not to Tap Reserves to Solve Estimated Budget Problem Emerges as Key Fiscal Decision Facing California’s Legislature

Apr 19, 2023 - In his 2021 book, The Resilient Society , Princeton University economist Markus Brunnermeier argues that for governments, being frugal in good times is what provides extra spending capacity —resilience —in bad times.
https://lao.ca.gov/Publications/Report/4762

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

Flexible Funding to California in the American Rescue Plan

Mar 23, 2021 - They are: (1)  to respond to the public health emergency or negative economic impacts associated with the emergency; (2)  to support essential work; (3)  to backfill a reduction in revenue that has occurred since 2018-19; or (4)  for water, sewer, or broadband infrastructure.
https://lao.ca.gov/Publications/Report/4407

Strong Tax Collections Belie California's Challenging Fiscal Outlook

Apr 26, 2022 - What About Downside Risk? While less peculiar, there also are risks to the budget from downside economic and revenue performance that increasingly warrant recognition in the state ’s fiscal planning efforts.
https://lao.ca.gov/Publications/Report/4590

The 2024-25 Budget: Initial Comments on the Governor’s May Revision

May 17, 2024 - The State Constitution ’s balanced budget provision prohibits the state from enacting a negative SFEU balance for the upcoming fiscal year, in this case, 2024-25. While historically the state mostly has enacted SFEU balances between $1  billion and $4  billion, the Legislature can choose to set the balance at any level above zero.
https://lao.ca.gov/Publications/Report/4902