Newsom Signs $351.7 Billion California Budget, Banking on $6.4 Billion Revenue Windfall
Updated
Updated · Los Angeles Times · Jun 30
Newsom Signs $351.7 Billion California Budget, Banking on $6.4 Billion Revenue Windfall
3 articles · Updated · Los Angeles Times · Jun 30
Summary
$351.7 billion takes effect July 1 as Gavin Newsom signed his final California budget, preserving free school meals, universal transitional kindergarten and 22,770 new subsidized childcare slots.
$6.4 billion in higher-than-expected revenue—driven by income taxes on AI-era stock market gains—will be parked in a temporary account to help close deficits through 2027-28.
Medi-Cal remains the biggest pressure point: the program serves 14.5 million people, costs the state about $50 billion from the general fund next year, and forced Newsom to pursue savings.
Lawmakers rejected some of Newsom’s deeper Medi-Cal cuts, including an immediate asset-limit drop to $2,000, while delaying dental reductions and some immigrant coverage changes.
The deal caps an eight-year expansion of state government that added more than $100 billion in spending, even as analysts warn the tax windfall could fade in an economic downturn.