California, We (Almost) Have a Budget

The California Legislature passed a slimmed-down version of Gov. Gavin Newsom’s May proposed budget late last week. The $327 billion spending package came in before the June 15 deadline, but the work is far from over.

The budget, as approved, marks a 10 percent increase over the $297.2 billion spending package signed into law for the 2024-25 fiscal year. At that time, the state was facing a much more significant budgetary shortfall — an estimated $46.8 billion.

This time around, the state is grappling with a $12 billion budget deficit driven by increased government spending and declining income and corporate tax revenues, according to the Legislative Analyst’s Office.

The recent legislative activity is far from the end of the process, however, as the Legislature and governor must now negotiate the finer points of the bill — especially around controversial issues such as the governor’s proposed Medi-Cal cuts and benefits changes — before being signed into law.

Efforts on the part of Assembly Republicans to increase funding for Proposition 36, the increased criminal sentencing measure, and wildfire prevention efforts were shot down by the state’s Democratic majority.

Lawmakers and Newsom have until June 27 to find common ground on the state budget.

Deep Dive Resources
SB 101: Budget Act of 2025
The 2025-26 Budget: Initial Comments on the Governor's May Revision
Newsom Offers Preview of FY 2025-26 Budget, Touts State’s Tech Gains
Newsom Unveils Revised Budget: What We Know and Don’t About His Proposal