Governor Newsom signs historic balanced state budget, cementing California’s fiscal strength and investing in the state’s future

Rejecting the false choice

The 2026-27 budget reflects a governing philosophy that has defined the Newsom administration: responsible budgeting is not about cutting ambitious goals or vital programs — it’s about building the fiscal strength to invest in what matters.

Through Governor Newsom’s policies, California has grown into a world-leading economy, expanding from $3 trillion to a $4.25 trillion GDP, attracting nearly two-thirds of all U.S. venture capital investment, building historic budget reserves, and contributed approximately $15 billion toward paying long-term pension liabilities — all while making record investments in Californians.

The budget preserves nearly $30 billion in reserves — and just over $35 billion when additional holding accounts are included — ensuring California remains prepared for future economic uncertainty.

Working alongside the Legislature, the Governor signed the Save for California’s Future Act, advancing a constitutional amendment that will strengthen and modernize California’s Rainy Day Fund for future generations.

A budget that invests in Californians

The budget signed today continues California’s commitment to investing in opportunity while maintaining long-term fiscal discipline.

Among its key provisions, the budget:

• Maintains a balanced budget with no projected deficit this year or next.
• Funds tax relief for California small businesses.
• Continues universal school meals, universal transitional kindergarten, expanded childcare, and free summer school.
• Delivers the largest single-year investment in special education in California history.
• Protects healthcare affordability and access.
• Advances housing reforms that reduce red tape and accelerate homebuilding.
• Continues historic investments in behavioral healthcare and Proposition 1 implementation.
• Invests in disaster recovery, wildfire resilience, infrastructure, workforce development, and public safety.
• Strengthens election administration while protecting against mis- and disinformation.

A legacy built for the long term

Today’s budget marks the culmination of years of disciplined fiscal management that positioned California to weather economic uncertainty without abandoning the investments that improve people’s lives.

During Governor Newsom’s administration, California became the first state to provide universal free school meals, expanded universal transitional kindergarten, dramatically increased childcare access, delivered record funding for public schools, expanded healthcare coverage to historic levels, launched the nation’s largest behavioral health transformation, made the largest infrastructure investment in modern state history, accelerated clean energy deployment, strengthened renter protections, expanded paid family leave and paid sick leave, increased wages for millions of workers, invested billions in affordable housing and homelessness response, and helped more students graduate college debt-free.

Those achievements were paired with responsible budgeting that built historic reserves, reduced debt, protected California’s credit, and left the state’s finances stronger than when the administration began.

As Governor Newsom said in today’s video, California’s experience demonstrates that “balancing the budget and doing big things take the exact same skill.”

This budget reflects that belief — protecting California’s fiscal future while continuing to invest in the people, communities, and economy that make the Golden State a global leader. A fact sheet on the budget is available here. 

The Governor today announced signing the following bills:

• AB 109 by Assemblymember Jesse Gabriel (D-Encino) — Budget Act of 2026.
• SB 110 by Senator John Laird (D – Santa Cruz) — Budget Act of 2026
• SB 111 by Senator John Laird (D-Santa Cruz) — Budget Act of 2026. 
• AB 112 by Assemblymember Jesse Gabriel (D-Encino) — Budget Acts of 2022, 2023, 2024, and 2025. 
• SB 122 by the Committee on Budget and Fiscal Review — Taxation.
• SB 125 by the Committee on Budget and Fiscal Review — Medi-Cal: managed care organization provider tax.
• AB 150 by the Committee on Budget — Early care and education.
• AB 152 by the Committee on Budget — Human services.
• SB 164 by the Committee on Budget and Fiscal Review — Health. 
• SB 170 by the Committee on Budget and Fiscal Review — Governor’s Reorganization Plan No. 1 of 2025: codification. 
• SB 174 by the Committee on Budget and Fiscal Review — Courts. 

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