SACRAMENTO – From State Sen. John Laird (D-Santa Cruz):

“The Governor’s Proposal for 2026-27 is roughly balanced, with few new spending commitments and includes General Fund reserves totaling $23 billion.

I appreciate the Governor’s approach to responsible budgeting for 2026-27, however this is made possible by an increase in revenue estimates of $42 billion over the Budget Act (through the three-year budget window of 2024-25 to 2026-27). 

I would also note that the Administration’s revenue picture is $30 billion over the estimate that the Legislative Analyst’s Office put forward in their November forecast.

We know we will have updated forecasts in May that will play a real role in our decision making for the final budget. But the estimates we ultimately use to craft our final budget will have a significant impact if we can adopt a plan like the Governor’s January proposal or whether much more difficult decisions need to be made after the May Revise.  We look forward to those discussions both in today’s hearing and through the spring.

Turning to what both forecasts agree on, is that there is significant work to be done to ensure fiscal stability in the coming years. Both projections show structural deficits of $20 billion or greater in 2027-28 and future years. Despite the possibility of revenues continuing to outperform estimates, the Administration and the Legislature must work together to address this challenge.

As always, the charge before us is to be responsible stewards of the state’s funds and continue the work of upholding California values. I look forward to deep discussions in many meetings of our five budget subcommittees in the areas of healthcare, social services, education, housing, and many others in the weeks ahead. And I look forward to public participation in our entire process.

We are ready to work together with our partners in the Assembly and the Administration to craft the state’s budget for the upcoming fiscal year.”