California Governor Gavin Newsom announced a revised state budget proposal on May 14, 2026, that closed a projected shortfall without dipping California back into deficit spending.
As he entered the final year of his administration, Governor Newsom stressed that the proposal eliminates the structural deficit to $0 through July 2028, while doubling down on social programs and healthcare protections in a sharp contrast to President Donald Trump’s policies.
The revised budget aims to maintain strong reserves and protect core services during “economic uncertainty and federal attacks on healthcare and working families,” according to the governor’s office.
The revised budget proposes to reduce General Fund spending by $1.8 billion, leaving the state with no projected deficit.
The administration plans to cut California’s long-term operating imbalance by more than half for the 2028-29 budget, marking a multi-year fiscal stabilization.
At the same time, the budget also invests in priorities including child care, schools, higher education, public safety, healthcare, housing, clean energy, new businesses, and protecting the state’s natural resources.
Our budget proposes:
– $300 million to help families with Trump’s rising healthcare costs
– 50% tax cut for new small businesses
– $5 billion for teacher training, retention, and paid maternity leave
– The largest special education investment in state history
– $100 million for…— Gavin Newsom (@GavinNewsom) May 15, 2026
The revised budget does not propose major new ongoing General Fund spending commitments, according to the governor’s office. Instead, the governor has prioritized “fiscal restraint, long-term sustainability, and protecting the state against future economic volatility.”
As part of that strategy, the proposal deposits $9.7 billion into California’s Surplus Holding Account to support future fiscal years and avoid overcommitting revenues during economic uncertainties.
The budget also maintains around $30 billion in combined reserves, including a Rainy Day Fund balance. According to the governor’s office, the state’s reserve levels have increased by 30% since Governor Newsom took office.
At the same time, the administration said the budget continues to invest in affordability and public services.
The proposals include a $300 million investment to help maintain healthcare affordability after the Trump administration failed to renew Affordable Care Act subsidies, along with a 50% cut in LLC fees for new small businesses.
The proposal also includes a record $5 billion block grant for priorities, including teacher training and support, a $2.4 billion ongoing increase for special education programs, and a $500 million investment to expand literacy and math support in high-need schools.
The revised budget also proposes a new $100 million disaster rebuilding fund to help wildfire survivors rebuild homes and new affordable housing reforms to lower construction costs and add more housing.
In his last year, Governor Newsom has projected the revised budget as proof that California can maintain progressive policy priorities while stabilizing finances.
“We’re balancing the budget, eliminating the deficit, cutting spending, and building reserves — all while protecting healthcare, education, and essential services for Californians,” he said.
First elected in 2018, Governor Newsom was re-elected in 2022, and his current term will conclude in January 2027. He cannot seek a third term due to term limits.
A vocal critic of the Trump administration and the president’s policies, Governor Newsom confirmed that he was planning to run for president in 2028, The Guardian reported in October 2025.
Still taking $7B from reserves. How is that balanced?
Um…Because it’s balanced, and even a projected surplus.
That’s what savings (reserves) are for.
I’ll believe it when I see it. But if so, why wait so long to trim all that 1.8 Billion in General Fund spending, ie fat? Doesn’t really add up.
Hey BASIC, don’t worry, that will be countered by the 1.7 Billion of our tax dollars that Trump is going to give to billionaire criminals that were investigated for crimes under Biden.
You guys keep winning so hard!
California is currently running on a structural deficit. While the $7 billion reserve grab “balances” the books for this year, the nonpartisan Legislative Analyst’s Office (LAO) has warned that the state cannot rely on reserves forever. By the end of the 2025–26 fiscal year, the Rainy Day Fund is expected to drop significantly (down to roughly $11–15 billion), leaving less of a cushion if a full-blown recession hits.
I do not call that balanced.
Yes, you’re definitely in the unbalanced column, just not fiscally.
It was dubbed “volatility” and reached an apex four years ago when Gov. Gavin Newsom declared that the state had a $97.5 billion surplus, having decided that a post-COVID-19 pandemic revenue spike would be permanent.Newsom’s administration later acknowledged a $165 billion error in a four-year revenue projection.
But in the meantime he and the Legislature had raised spending, creating deficits that totaled $125 billion over four years, according to the Legislative Analyst Office.
Way to go Slick
KA PLAGIARIST – Hey dude, you’ve been caught so many times plagiarising. It’s super easy to catch you too, as your own comments are MILES apart in terms of cognitive ability and vocabulary. Using Google AI is one thing , but outright lifting and copying other people’s words, ESPECIALLY from an Op Ed, is so wildly stupid. It’s even more galling that you think by simply switching “His” to “Newsom’s” (amazing you even spelled it right) that you would fool anyone. Funniest part is you didn’t even bother to check if your grammar/formatting was correct.
“It was dubbed “volatility” and it reached an apex four years ago when Gov. Gavin Newsom declared that the state had a $97.5 billion surplus, having decided that a post-COVID-19 pandemic revenue spike would be permanent.
His administration later acknowledged a $165 billion error in a four-year revenue projection.
But in the meantime he and the Legislature had raised spending, creating deficits that totaled $125 billion over four years, according to the Legislative Analyst Office.”
https://www.noozhawk.com/dan-walters-gavin-newsoms-tightfisted-final-budget-faces-rough-reception-in-legislature/
STOP STEALING OTHER PEOPLES’ WORDS.
You and BASIC truly have no shame, do you? Hope you don’t have anyone looking to you guys for life lessons. That would be tragic.