By Bo Tefu, California Black Media

Gov. Gavin Newsom and Democratic legislative leaders announced a final agreement June 26 on California’s $355.9 billion 2026–27 state budget, saying the spending plan preserves health care and other essential services while eliminating projected deficits through the next two fiscal years.

The agreement between Newsom, Senate President Pro Tempore Monique Limón (D-Santa Barbara), and Assembly Speaker Robert Rivas (D-Hollister) balances the budget while maintaining investments in health care, education, housing, public safety and other priorities despite continued economic uncertainty and federal funding challenges.

“A balanced budget isn’t an end in itself — it’s how we deliver for Californians,” Newsom said. “This budget demonstrates responsible choices that protect our fiscal strength while continuing to invest in what matters most. In California, we support working families, create more opportunity, and build safer, healthier communities.”

The budget includes $300 million to lower health care costs, preserves $0 monthly health plans for many lower-income Californians, and helps offset higher insurance premiums resulting from the expiration of enhanced federal Affordable Care Act subsidies. It also protects funding for behavioral health programs and continues implementation of Proposition 1.

Other major investments include a record $2.4 billion in ongoing funding for special education, $5 billion for TK-12 schools, $500 million in Low-Income Housing Tax Credits, $200 million for affordable multifamily housing, a $100 million Disaster Rebuilding Fund, and new funding to strengthen election security, voter outreach and protections against misinformation. The agreement also preserves free school meals, universal transitional kindergarten, universal preschool, summer school programs and childcare slots.

Limón said lawmakers worked to shield Californians from federal spending reductions while strengthening the state’s finances.

“Today’s 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,” Limón said. “I am also proud that the Senate was able to secure critical funding for childcare slots, safeguard access to care, and take significant steps toward ensuring large corporations pay their fair share.”

Rivas said the budget “protects health care, preserves food programs, invests in housing at record levels and builds reserves to fight back no matter what Trump and Republicans throw at us.”

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