California Democratic Gov. Gavin Newsom has signed a nearly $352 billion state budget that delays healthcare cuts, expands childcare funding and provides new resources to speed up election vote counting ahead of November.
The spending plan is Newsom’s final budget before leaving office in January and comes as speculation grows that he could pursue a presidential campaign. The state’s financial decisions are likely to face renewed scrutiny if he seeks national office.
Newsom used the budget signing to highlight accomplishments from nearly eight years as governor, including free school meals, expanded internet access, renewable energy investments, and higher wages for fast-food and healthcare workers. He also pointed to the state’s reserves as evidence that California can balance major investments with fiscal responsibility.
“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,” Newsom said, pushing back against criticism from Republicans, including President Donald Trump, who have frequently targeted the state’s spending and policies.
The budget avoids major tax increases but raises revenue through targeted measures, including changes to a healthcare provider tax, a new sales tax on some software products and limits on certain corporate tax breaks. Newsom has rejected broader proposals, including a one-time billionaire tax backed by a healthcare union.
Democrats who control the Legislature said the plan eliminates the state’s projected deficit and helps shield low-income residents from federal healthcare cuts. Assembly Budget Committee Chair Jesse Gabriel said the state worked to “protect vulnerable communities,” while acknowledging California could not fully replace lost federal funding.
Republicans argued the budget only delays difficult decisions. State Sen. Roger Niello said Newsom was leaving future leaders with the financial consequences of current spending.
California has faced repeated budget challenges in recent years, including projected multibillion-dollar shortfalls. A surge in tax revenue, fueled in part by strong stock market gains tied to artificial intelligence companies, gave lawmakers more flexibility and allowed them to reverse some planned cuts.
The budget delays reductions to Medi-Cal benefits, including cuts affecting low-income immigrants without legal status and proposed premiums for some recipients. A planned monthly premium increase was pushed to the next governor.
Childcare remains a priority for Newsom, with the budget funding nearly 23,000 new childcare spaces.
The spending plan also directs nearly $29 million to the secretary of state’s office for election staffing and technology upgrades, along with $10 million for voter education efforts. Another $1 million will go toward combating election misinformation.
The funding comes after years of criticism over California’s slow vote-counting process. Trump and other Republicans have claimed, without evidence, that delays contribute to election fraud concerns.
The November election will feature several closely watched races, including competitive congressional contests, ballot measures and the race to replace Newsom.
Lawmakers also postponed several major decisions, including how to spend future cap-and-trade revenue and whether to penalize large companies whose workers rely on Medi-Cal rather than employer-sponsored health insurance.
Democratic state Sen. María Elena Durazo criticized the delays, saying: “This is a budget that bought time: Medi-Cal delayed, not resolved, not restored.”
The budget also transfers more authority to the governor over the state Department of Education, a move Newsom says could help improve student outcomes.
