The revised budget balances both the 2026-27 and 2027-28 fiscal years while making substantial progress in reducing long-term operating deficits in future years.\u00a0<\/p>\n
The revised budget does not propose significant new ongoing General Fund spending commitments. Instead, the Governor\u2019s plan prioritizes fiscal restraint, long-term sustainability, and protecting the state against future economic volatility.\u00a0<\/p>\n
To strengthen California\u2019s long-term position, the budget deposits $9.7 billion into the state\u2019s Surplus Holding Account to help support future fiscal years and avoid overcommitting revenues during uncertain economic conditions. It also maintains nearly $30 billion in combined reserves \u2014 which has grown 30% since Governor Newsom took office \u2014 including a growing Rainy Day Fund balance.\u00a0<\/p>\n
While restoring fiscal stability, the revised budget continues major investments in affordability and essential services, including:<\/p>\n
A $300 million investment to protect healthcare affordability after Trump\u2019s failure to renew Affordable Care Act subsidies
\nA 50% tax cut for hundreds of thousands of new small businesses through lower LLC fees
\nA record $5 billion block grant for priorities such as\u00a0 teacher training and support
\nThe largest special education investment in California history \u2014 a $2.4 billion ongoing increase
\nA $500 million investment to expand literacy and math support in high-need schools
\nA new $100 million disaster rebuilding fund to help wildfire survivors rebuild homes
\nNew affordable housing reforms to reduce construction costs and build more housing<\/p>\n
The full text of the Governor\u2019s Budget summary document is available at ebudget.ca.gov<\/a>. A fact sheet is available here<\/a>. The Governor\u2019s budget presentation slides are available here<\/a>.\u00a0<\/p>\n