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

Jan 12, 2026 - Under two voter initiatives, the State Constitution requires the state to set aside a share of revenues for schools and community colleges (Proposition  98, 1988) and debt payments and reserve deposits (Proposition  2, 2014).
https://lao.ca.gov/Publications/Report/5101

The 2024-25 Budget: Proposition 2 Debt Payment Proposals

Mar 20, 2024 - As we discuss in greater detail below, the voters approved Proposition  2 in 2014 to establish a constitutional requirement that, among other requirements, requires the state to make specified levels of debt payments, including towards pension unfunded liabilities.
https://lao.ca.gov/Publications/Report/4887

The 2026-27 Budget: California's Fiscal Outlook

Nov 19, 2025 - This is because constitutional spending requirements under Proposition  98 (1988) and Proposition  2 (2014) almost entirely offset revenue gains. Moreover, we estimate costs in other programs to be about $6  billion higher than anticipated.
https://lao.ca.gov/Publications/Report/5091

The 2025-26 Budget: Overview of the Spending Plan

Oct 16, 2025 - Proposition   98 “Settle Up ” ($1.9   Billion). Proposition  98 (1988) sets a minimum funding requirement for schools and community colleges based on formulas in the State Constitution. The state makes an initial estimate of this requirement when it enacts the budget, then revises this estimate over the following two years to reflect updated data.
https://lao.ca.gov/Publications/Report/5079

The 2025-26 Budget: Initial Comments on the Governor's May Revision

May 17, 2025 - The  largest component is a $1.5  billion upward revision to the entering fund balance, primarily driven by higher ‑than ‑expected reversions of unspent funds and lower required Proposition  2 (2014) debt payments.
https://lao.ca.gov/Publications/Report/5044

Rethinking California's Reserve Policy

Apr 10, 2025 - In 2014, voters approved significant reforms to the state ’s reserve policy with Proposition  2. This measure substantially improved the state ’s reserve policy, particularly relative to recent history.
https://lao.ca.gov/Publications/Report/5028

The 2021-22 Budget: The Governor’s Proposition 2 Proposals

Apr 26, 2021 - The 2021-22 Budget: The Governor’s Proposition 2 Proposals The Governor ’s Proposition  2 Proposals Introduction Passed by voters in 2014, Proposition  2 changed budgeting practices concerning: (1)  reserves and (2)  debt payments.
https://lao.ca.gov/Publications/Report/4418

Reserves, Proposition 2, and the Budget Stabilization Account (Panel 1) [Publication Details]

May 7, 2025 - Reserves, Proposition 2, and the Budget Stabilization Account (Panel 1) [Publication Details] Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only.
https://lao.ca.gov/Publications/Detail/5040

The 2022-23 Budget: Fiscal Outlook for Schools and Community Colleges

Nov 17, 2021 - Make Optional Proposition 98 Reserve Deposit. An additional one ‑time deposit into the Proposition 98 Reserve would increase the protection for ongoing programs in the event of an economic downturn, reducing the likelihood of cuts or deferrals.
https://lao.ca.gov/Publications/Report/4473

The 2025-26 Budget: Multiyear Budget Outlook

May 24, 2025 - Offsetting this, our projections for school and community college spending are higher, reflecting Proposition  98 (1988) formulas that typically increase (or decrease) with changes in revenue. Additionally, our estimates for spending in other areas —primarily health and human services programs —are somewhat higher than the administration ’s projections.
https://lao.ca.gov/Publications/Report/5052