California leaders announce balanced 2026-27 budget with zero projected deficit
California Gov. Gavin Newsom, Senate President pro Tempore Monique Limón and Assembly Speaker Robert Rivas announced a three-party agreement June 26 on the state’s 2026-27 budget, describing it as balanced with a zero projected deficit for that fiscal year and the one that follows.
The agreement would set aside more than $6 billion in anticipated revenue in a holding account while directing resources to a range of statewide priorities. It is an announced agreement, not a final enacted budget, and the governor and legislative leaders said they would continue the constitutional budget process in the following days.
The announcement was made in Sacramento and concerns California’s statewide 2026-27 fiscal year. The release did not provide one total spending figure for the proposed budget or detailed schedules for individual allocations.
Two-year projection and revenue holding account
Leaders said the agreement projects no deficit for two consecutive fiscal years: 2026-27 and the following year. That is a budget projection, rather than a finding that California faces no longer-term fiscal risk.
The plan would place more than $6 billion in anticipated revenues into a holding account. The announcement framed the agreement as setting spending priorities amid economic uncertainty and conflicts over federal funding.
Because the release did not include a single overall spending total, it does not establish how the proposed holding account compares with the complete budget or itemize every proposed allocation.
Education, child care and business provisions
The agreement includes funding for small-business tax cuts, free school meals, summer school, universal preschool and additional child-care slots.
It also includes billions in funding for transitional kindergarten through 12th-grade schools, community colleges and higher education. Those proposed priorities involve students, families, public education systems and child-care providers, as well as small businesses covered by the tax-cut component.
The announcement identifies these as elements of the agreement. It does not, on its own, establish that every program has been fully funded in final budget law or specify the amount assigned to each education or child-care item.
Housing, elections and other statewide priorities
On housing and homelessness, the agreement advances housing-finance reforms and adds accountability measures for state homelessness funding. The source announcement did not describe the specific reforms or the particular accountability requirements.
The plan also provides new funding intended to increase election staffing, voter outreach and voter education, and to combat misinformation. Those provisions are relevant to California elections agencies and voters who receive election information and outreach.
In addition, the announcement identifies health care, disaster recovery and public safety as areas receiving resources under the agreement. It does not provide individual dollar amounts or program-level details for those areas.
Budget process still ahead
Newsom, Limón and Rivas said they would continue the constitutional budget process after the June 26 announcement. That means the agreement should be understood as the leaders’ proposed budget deal, with provisions still subject to the remaining legislative and gubernatorial actions in that process.
The known next step is continuation of that constitutional process in the days following the announcement. No separate deadline for final action was stated in the source material.
Sources
- Governor Newsom, Legislative leaders announce 2026-27 balanced budget agreement, Office of Governor Gavin Newsom