Key facts
- Governor Gavin Newsom signed a $352 billion spending plan.
- The budget delays cuts to healthcare programs and increases funding for childcare.
- The plan allocates $29 million to speed up vote counting and $10 million for voter education.
- The budget aims to increase state revenues through reforms to a healthcare provider tax and a sales tax on software.
- Higher tax revenues, attributed in part to the AI boom, helped avoid deeper cuts.
- Some major spending decisions were deferred to Newsom's successor.
California Governor Gavin Newsom has signed a $352 billion spending plan, his final budget before leaving office in January. The budget avoids major cuts or significant new spending, instead delaying some reductions to healthcare programs, increasing funding for childcare, and allocating resources to expedite the state's vote count ahead of the November election.
Newsom used the budget's passage to highlight his administration's policy achievements over his nearly eight years as governor, including free school meals, expanded internet access, renewable energy production, and minimum wage increases for fast food and healthcare workers. He emphasized the state's fiscal prudence by increasing reserves, contrasting California with Republican-led states and the federal administration.
The budget aims to boost state revenues through reforms to a healthcare provider tax and a sales tax on certain software products, while limiting tax breaks for large corporations. While Newsom has generally opposed broad tax increases, he has approved targeted measures. The plan includes no deficit for the upcoming fiscal year and seeks to mitigate the impact of federal cuts to healthcare for low-income individuals.
Republicans criticized the budget, arguing it delays spending rather than implementing necessary cuts. Nonpartisan analysts had projected significant budget holes for the state in the coming years, though Newsom's office has sometimes differed in its estimations. Higher-than-expected tax revenues, partly fueled by the booming stock market driven by enthusiasm over the artificial intelligence industry, allowed lawmakers to avoid some previously approved cuts, such as to dental benefits for low-income immigrants.
The budget also includes funding for the Secretary of State's office to improve vote counting technology and staffing, as well as resources for voter education and combating election misinformation. Some significant spending decisions have been deferred to Newsom's successor, with the decision on potential higher monthly premiums for Medi-Cal recipients left to the next governor.