Governor Gavin Newsom today signed California's 2026–27 state budget, enacting a balanced spending plan that ensures no projected deficit this year or next while preserving historic reserves and making significant investments in the state's future. The Governor also released a video message emphasizing California's record of fiscal responsibility and transformative public investments.
Newsom highlighted the state's approach, saying, "For decades, we've been told that government has to choose between balancing the books and investing in people. California proved that's a false choice." He added that the budget reflects years of disciplined decisions that built historic reserves, paid down debt, strengthened the economy, and made transformational investments across various sectors.
The budget maintains nearly $30 billion in reserves, with over $35 billion including additional holding accounts, preparing California for future economic uncertainty. Under Newsom's administration, California's GDP expanded from $3 trillion to $4.25 trillion, attracting nearly two-thirds of all U.S. venture capital investment. The state also contributed approximately $15 billion towards long-term pension liabilities.
Key provisions of the budget include tax relief for small businesses, continued funding for universal school meals, transitional kindergarten, expanded childcare, and free summer school. It also delivers the largest single-year investment in special education in California history, protects healthcare access, advances housing reforms, and invests in behavioral healthcare, disaster recovery, infrastructure, and public safety. The Governor also signed the "Save for California's Future Act," advancing a constitutional amendment to strengthen the Rainy Day Fund.
Newsom concluded that the state is "leaving California stronger than we found it — and leaving the next generation a state that's fiscally sound, economically dominant, and ready for whatever comes next."