Gov. Gavin Newsom on Thursday released a revised 2026–2027 California budget proposal that his office says eliminates the state’s projected operating deficit through July 2028.
Late last year, the state’s nonpartisan budget analyst warned that California was on track to spend about $18 billion more than it would bring in next year. Newsom says the new proposal closes that gap, largely because tax revenue came in higher than expected.
State Republicans say Newsom’s proposal is not real spending discipline—just an unexpected bump in tax revenue—and that the extra money should be returned to taxpayers.
Newsom’s plan would cut General Fund spending by $1.8 billion and deposit $9.7 billion into the state’s Surplus Holding Account, the governor’s office said. The administration also reported $16.5 billion in revenue above earlier projections and said the state maintains roughly $30 billion in combined reserves. The proposal projects no deficit for the current budget year, no deficit next year, and zero structural deficit through July 2028….
Newsom Says Revised California Budget Eliminates State Deficit Through 2028
