The California Legislative Analysts' Office predicted a largely balanced budget outlook in the upcoming fiscal year, but warned about uncertainties.

The nonpartisan Legislative Analyst’s Office projects a $2 billion shortfall for 2025-26, but says the state can’t afford big new programs. Gov. Newsom has complained about attention on the office’s deficit estimates.

California probably will not see a big deficit next year, but also won’t have room for much new spending, the state Legislature’s fiscal analyst predicted. That could be bad news for those who want the state to lead the resistance to Donald Trump’s second term as president.