Newsom Signs Balanced California Budget, Preserving $30 Billion in Reserves

SACRAMENTO, California — Governor Gavin Newsom signed California’s 2026–27 state budget on Sunday, delivering a balanced spending plan with no projected deficit this year or next and preserving nearly $30 billion in reserves. The budget, the product of negotiations between Newsom and legislative leaders, funds education, healthcare, housing, infrastructure, and public safety while maintaining what the governor described as the state’s strongest fiscal footing in generations.

Saratoga, a city of roughly 31,000 residents in Santa Clara County, is located in Silicon Valley about 50 miles south of San Francisco at the base of the Santa Cruz Mountains.

The spending plan protects a series of signature programs launched during the Newsom administration, including universal free school meals, transitional kindergarten, expanded childcare, and free summer school. It also funds what the administration calls the largest single-year investment in special education in state history. Small business tax relief is maintained, and healthcare access is preserved alongside continued investment in behavioral health and Proposition 1 implementation.

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. This budget reflects years of disciplined decisions that built historic reserves, paid down debt, strengthened our economy, and made transformational investments in education, healthcare, housing, infrastructure, and opportunity.

— **Governor Gavin Newsom**, upon signing the 2026–27 California state budget

The budget also includes housing reforms aimed at reducing regulatory barriers to homebuilding, investments in disaster recovery and wildfire resilience, infrastructure and workforce development, and measures to strengthen election administration and counter disinformation. An additional $15 billion has been directed toward long-term pension liabilities.

California’s economy has grown from $3 trillion to $4.25 trillion in GDP under Newsom’s tenure, and the state now attracts nearly two-thirds of all U.S. venture capital investment. The governor also signed the Save for California’s Future Act, a constitutional amendment to further strengthen the state’s Rainy Day Fund.

The budget was signed through a package of bills including AB 109, SB 110, and several related measures. The administration emphasized that fiscal discipline and ambitious public investment are not mutually exclusive, framing the budget as a model for how states can invest in their future without sacrificing fiscal responsibility.

Source: https://www.gov.ca.gov/2026/06/29/signedbudget/