Assembly Budget Committee opens budget season as administration presents balanced 2025‑26 proposal amid out‑year deficits and wildfire uncertainty

The California State Assembly Budget Committee opened its 2025 budget season on Jan. 10 with an overview from the Department of Finance and the Legislative Analyst's Office of the governor's proposed 2025–26 budget and extensive member questions about reserves, wildfire response and priority spending.

Erica Lee of the Department of Finance told the committee the governor's proposal is "balanced without the need for further solutions" for the coming year while recognizing significant risks. Lee said the budget would include $322.3 billion in total spending and $228.9 billion from the General Fund and would preserve a planned $7.1 billion withdrawal from the Budget Stabilization Account while leaving roughly $17 billion in remaining reserves, including a $4.5 billion Special Fund for Economic Uncertainties.

The Legislative Analyst's Office (LAO) also briefed the committee and expressed caution. LAO analyst Gabe Padek said the administration and LAO currently view the budget as roughly balanced for the upcoming year but both offices project large deficits in later years — the administration's estimate in the range of $13 billion to $19 billion per year and the LAO's projection larger, growing toward $20 billion to $30 billion by the end of the multiyear window. "We both see quite large deficits," Padek said.

Why it matters: committee members and both fiscal offices emphasized that near‑term balances depend on volatile revenue sources, notably…