California is staring at another major budget shortfall, with the state’s nonpartisan Legislative Analyst’s Office (LAO) projecting that next year’s deficit will hit nearly $18 billion and describing the state’s budget position as “relatively weak.”
The LAO report, released on Nov. 19, is an early look at the 2026–27 budget. It paints a picture of a state with growing obligations, slowing economic momentum, and fewer tools left to steady itself as it faces the prospect of the fourth straight year of operating in the red.
