The Legislature passed a budget on June 15, though negotiations between Democratic leaders and Governor Gavin Newsom continued over the past two weeks to reach a final budget.<\/p>\n
SACRAMENTO, Calif. (CN) \u2014 Top California leaders on Friday announced a budget agreement between lawmakers and the governor while continuing their verbal sparring match with President Donald Trump.<\/p>\n
Governor Gavin Newsom, Assembly Speaker Robert Rivas and Senate President pro Tempore Monique Lim\u00f3n revealed a state budget agreement they say eliminates deficits for the next two fiscal years while bolstering California\u2019s fiscal stability.<\/p>\n
The budget agreement calls for $251.5 billion in spending from the state\u2019s general fund in fiscal year 2026-27, climbing to a total of $351.7 billion when including all funds. It\u2019s a slight decrease from the Legislature\u2019s budget<\/a>, passed June 15, which sought $253 billion in general fund spending, and $355.9 billion total.<\/p>\n Over $28 billion is slated for the state\u2019s reserve funds, the Finance Department said.<\/p>\n Lawmakers had a deadline of June 15 to pass a budget, though negotiations continued with Newsom over the past two weeks to reach a final budget. The governor must sign a budget before the next fiscal year begins on Wednesday.<\/p>\n \u201cA balanced budget isn\u2019t an end in itself \u2014 it\u2019s how we deliver for Californians,\u201d Newsom said in a statement. \u201cThis budget demonstrates responsible choices that protect our fiscal strength while continuing to invest in what matters most.\u201d<\/p>\n Newsom and Democratic legislators slammed Trump during the budget process, laying blame at the White House over the Big Beautiful Bill, what they called politically motivated attacks and withholding state funding. They\u2019ve said Republicans on the national stage have pulled funding for state healthcare systems, forcing state lawmakers into hard choices.<\/p>\n \u201cDespite continued funding cuts from the federal administration, California was able to mitigate the impacts to programs that millions rely on,\u201d Lim\u00f3n said in a statement. \u201cThis budget agreement reflects our commitment to protect core programs and address our short- and long-term financial future by building up our rainy-day fund and making balanced budget choices.\u201d<\/p>\n Lim\u00f3n\u2019s office highlighted the creation of the fair share from big corporations\u2019 program, saying it would push back against the Big Beautiful Bill\u2019s cuts, and the governor\u2019s administration will develop options for lawmakers to take, ensuring large corporations are accountable for their employees\u2019 healthcare costs.<\/p>\n Legislators will receive those options by April 1 and consider them during next year\u2019s budget process.<\/p>\n \u201cWorking families deserve a budget that has their back \u2014 and that\u2019s exactly what California is delivering,\u201d Rivas said in a statement. \u201cWe\u2019re protecting healthcare, preserving food programs, investing in housing at record levels and building reserves to fight back no matter what Trump and Republicans throw at us.\u201d<\/p>\n Lawmakers pointed to $900 million in funding for the latest round of the Homeless Housing, Assistance and Prevention program \u2014 $400 million more than Newsom had in his May revised budget<\/a>.<\/p>\n The agreement also rejected Newsom\u2019s proposed cuts to the state\u2019s In-Home Supportive Services, which allows people with disabilities to remain in their homes rather than in a care facility.<\/p>\n It also provides $50 million to fund Proposition 36, which reinstated harsher punishments for certain property and drug crimes\u00a0\u2014 much less than Republicans wanted.<\/p>\n Finding new revenue sources, the agreement approved Newsom\u2019s plan to place a sales tax on electronically delivered software, which will boost general fund revenue by $450 million in 2026-27 and $900 million in 2027-28 and beyond.<\/p>\n Lim\u00f3n\u2019s office called two ballot measures headed to November\u2019s ballot key pillars of the broader budget picture.<\/p>\n