SACRAMENTO, CALIF. — California Democratic Governor Gavin Newsom signed a nearly $352 billion spending plan on Monday, June 29, 2026. This action finalizes his last state budget before he leaves office in January.

The spending plan delays some cuts to healthcare programs and increases funding for childcare. It also allocates money to help accelerate the state's vote count ahead of the November election. Newsom and legislative leaders stated their plan includes no deficit for the upcoming fiscal year, though California previously experienced budget deficits totaling tens of billions of dollars.

The budget aims to increase state revenues by reforming a tax on healthcare providers, imposing a sales tax on certain software products, and limiting tax breaks for large corporations. It also includes funding for nearly 23,000 new childcare spaces for the upcoming fiscal year. In a video address, Newsom promoted state policies and spending related to free school meals, expanded internet access, increased renewable energy production, and higher minimum wages for fast food and healthcare workers.

The budget sets aside $29 million for the Secretary of State's office to speed up the vote count by increasing staffing and upgrading technology. It also dedicates $10 million to educate voters on the state's election process, with half going to counties and the remainder to the state. Additionally, the budget includes nearly $1 million to support efforts aimed at combating misinformation regarding state elections.

The budget shifts management of the state's Department of Education to the governor. Lawmakers also delayed a decision on how to change the way the state spends revenue from its cap-and-trade program. They intend to explore methods to penalize large companies for enrolling employees in Medi-Cal instead of providing company-sponsored healthcare plans, and plan to direct the Department of Finance to present options for these penalties. Any proposed corporate penalties would not receive approval until next year at the earliest.

The revenue increase allowed lawmakers to prevent some cuts approved in last year's budget, such as slashing dental benefits for low-income immigrants without legal status and increasing Medi-Cal premiums for adults aged 19 to 59. Last year, lawmakers agreed to require these recipients to pay $30 a month starting next year. Newsom proposed a $50 monthly premium increase last month; however, the budget deal leaves the decision concerning a higher Medi-Cal premium rate to the next governor. Assembly Budget Committee Chair Jesse Gabriel said the state was not "in a position to fully backfill those federal cuts." He added, "We have done a lot of work to mitigate harm, to protect vulnerable communities."

State Senator Roger Niello stated that Newsom is leaving the state with outstanding liabilities. Conversely, Newsom issued a message to other states and Washington, D.C.: "To every other state across our country — to Washington, D.C. — to anyone who's been told that responsibility and ambition can't share the same balance sheet: Come to California."