\u201cIn January, California was faced with a difficult fiscal outlook that prompted the legislature to take a hard look at the financial future of the Golden State. Thankfully, despite continued funding cuts from the federal administration, California was able to mitigate the impacts to programs that millions rely on. Today\u2019s 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 responsible budgeting choices. I am also proud that the Senate was able to secure critical funding for child care slots, safeguard access to care, and take significant steps towards ensuring large corporations pay their fair share. Thank you to the Governor and Speaker of the Assembly for their partnership to deliver a strong foundation for our future.\u201d\u00a0
Senate President pro Tempore Monique Lim\u00f3n\u00a0<\/p>\n
\u201cWorking families deserve a budget that has their back \u2014 and that\u2019s exactly what California is delivering. We\u2019re protecting health care, preserving food programs, investing in housing at record levels and building reserves to fight back no matter what Trump and Republicans throw at us. While Washington\u2019s agenda drives up prices and guts critical programs, California is focused on what matters: Real solutions that put affordability first.\u201d
Assembly Speaker Robert Rivas<\/p>\n
Commitment to help Californians\u00a0<\/p>\n
The budget agreement reflects the Governor and Legislature\u2019s longstanding commitment to balanced budgets that protect Californians while preparing the state for future economic uncertainty.\u00a0<\/p>\n
Governor Newsom\u2019s administration has prioritized building reserves, reducing long-term liabilities, and making historic investments in education, public safety, housing, healthcare, climate resilience, infrastructure, and economic opportunity.<\/p>\n
Earlier this week, Governor Newsom and legislative leaders announced two major agreements that form key pillars of the broader budget package:\u00a0<\/p>\n
The historic Veterans and Affordable Housing Bond Act of 2026<\/a> to help fund housing construction, preserve affordable housing, and expand homeownership opportunities, including assistance for veterans, middle- and lower-income households, affordable rental housing, and interim and supportive housing for people experiencing homelessness.\u00a0\u00a0 Among its key priorities, the balanced budget agreement:<\/p>\n Maintains a balanced budget \u2014 not just for the coming fiscal year, but the following year as well \u2014 by setting aside more than $6 billion in anticipated revenues in a holding account. The agreement also reflects California\u2019s continued commitment to responsible fiscal management, preserving the state\u2019s ability to respond to future economic conditions while protecting the essential programs Californians rely upon.<\/p>\n The Governor, Senate, and Assembly will continue working together through the constitutional budget process in the coming days.<\/p>\n California\u2019s fiscal foundation<\/p>\n Over the past seven years, California has transformed its fiscal outlook by paying down debt, building historic reserves, maintaining the state\u2019s credit rating, and making record investments in the people and infrastructure that power one of the world\u2019s largest economies. This budget continues this disciplined approach \u2014 protecting essential services today while positioning California for long-term success.<\/p>\n Since Governor Newsom took office, California has:<\/p>\n Built and maintained the largest state budget reserves in California history. The 2026-27 budget agreement continues this disciplined approach \u2014 making strategic investments while preserving California\u2019s fiscal strength for years to come. A fact sheet is available here<\/a>.\u00a0<\/p>\n
\nThe Save for California\u2019s Future Act<\/a>, a constitutional amendment that strengthens the state\u2019s Rainy Day Fund and modernizes California\u2019s fiscal safeguards to better prepare for future economic uncertainty. The Save for California\u2019s Future Act will also help protect schools and businesses by reducing unemployment insurance trust fund liabilities and potential costs for employers.\u00a0<\/p>\n
\nContinues investments in public safety and efforts to improve community safety across California.
\nAdds billions in funding for TK-12 schools, community colleges, and higher education.
\nImproves school support and accountability<\/a> by moving management of the Department of Education into the Executive Branch, and strengthens the State Superintendent\u2019s role to foster alignment of education policies across public education from TK through college.
\nLimits large corporate tax breaks for the state\u2019s largest corporations to help protect California\u2019s critical programs, including healthcare.
\nAdvances critical state housing finance reforms to accelerate affordable housing construction, reduce costs, and make state housing investments go further, while strengthening accountability for state homelessness funding.
\nContinues investments in behavioral healthcare and implementation of Proposition 1.
\nSupports healthcare access for Californians.
\nMaintains California\u2019s leadership on climate resilience, clean energy, and wildfire preparedness.
\nInvests in infrastructure, economic growth, workforce development, and affordability.
\nProvides new investments to safeguard and speed up elections \u2013 increase staffing, voter outreach and education, and combat mis- and disinformation.<\/p>\n
\nPaid down billions of dollars in long-term liabilities.
\nMade historic investments in education, transportation, public safety, housing, behavioral health, climate resilience, and economic opportunity.
\nContinued prioritizing one-time investments where appropriate to strengthen the state\u2019s long-term fiscal outlook.
\nAdvanced landmark reforms balancing fiscal discipline with long-term investments, such as modernizing budget reserves and championing significant housing and homeownership initiatives.<\/p>\n