Governor Newsom Signs Historic Balanced State Budget

SACRAMENTO – Governor Gavin Newsom today signed California’s 2026-27 state budget, enacting a balanced spending plan that protects Californians today while strengthening the state’s long-term fiscal future. The Governor released a video message outlining the philosophy that has guided California’s fiscal stewardship over the past seven years — rejecting the false choice between responsible budgeting and making transformational investments in people.

A broadcast version can be viewed here.

The budget is balanced, structurally sound, and leaves no projected deficit this fiscal year or next, all while preserving historic reserves and continuing investments that make California more affordable, more competitive, and more prepared for the future.

 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.

The budget signed June 29 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.

As Governor Newsom said in the 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.