CSAC Bulletin Article

LAO Releases Gloomy 2024-25 State Revenue Forecast

December 8, 2023

What happened today?

Today, the 2024-25 Budget: California’s Fiscal Outlook  was published by the Legislative Analyst’s Office (LAO). At this time, the LAO forecasts a state budget deficit of $68 billion in fiscal year 2024-25 due mostly to the net effect of unexpected revenue changes in 2022-23 and 2023-24 . The Fiscal Outlook details the perceived economic weaknesses and forecasted revenue changes that resulted in the anticipated state budget shortfall. The 2024-25 Fiscal Outlook also includes the LAO’s assumptions about the state’s economy for fiscal years 2024-25 through 2027-28 and how the state’s economy affects the state’s annual revenues and expenditures.


The LAO is the California Legislature’s nonpartisan fiscal and policy advisor. The LAO’s annual Fiscal Outlook publication provides an independent assessment of the California state budget condition for the upcoming fiscal year. The publication also includes a forecast of the state’s longer-term condition, typically a three-year period following the upcoming fiscal year.

At the Government Finance and Administration policy committee meeting during the CSAC annual meeting in November, we invited the LAO to present their fiscal outlook for the 2024-25 budget. Due to the IRS extension of the tax filing deadline for California, and the resulting delay in key data used to develop the fiscal outlook, the LAO postponed the release of the fiscal outlook and presented on preliminary findings and analysis during the policy committee meeting.

What’s next?

Looking ahead, Governor Newsom will announce his administration’s proposed state budget for 2024-25 and the state’s updated revenue forecast by January 10, 2024. CSAC will continue to monitor the state’s economic condition and keep counties informed of economic assessments that may aid in preserving fiscal sustainability in the years ahead.

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