This working paper proposes a structural framework to reduce fiscal volatility in California’s state budget without broad tax increases or service cuts. The approach is grounded in three mutually reinforcing pillars: sustained land and forest management as preventative infrastructure; reclassification and monetization of underutilized correctional facilities; and incremental diversification toward low-volatility, system-based revenue streams tied to infrastructure, land, and risk exposure rather than personal income. Under conservative assumptions, the framework is capable of funding approximately 5 billion annually in wildfire prevention, reducing long-run disaster and liability costs by 15–20 billion per year, eliminating a regressive and volatile tax without reducing net revenue, and generating approximately 10 billion in durable fiscal headroom at steady state. All fiscal figures are illustrative and intended to compare structural volatility behavior rather than provide a formally scored legislative estimate. The proposal is incremental, stress-tested, and designed to operate within existing statutory authority.
Matthew Dominik (Sat,) studied this question.
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