Newsom Unveils Proposed California State Budget: States of Play

Jan. 12, 2026, 7:50 PM UTC

CALIFORNIA GOV. GAVIN NEWSOM (D) proposed a $349 billion budget for the fiscal year that begins in July that leans on steadier economic growth and resilient financial markets to keep the state’s projected deficit to about $3 billion, a far smaller gap than earlier estimates.

  • The plan includes $248 billion in general fund spending, about $11 billion more than the current year, as revenue rebounds on stronger cash receipts, elevated stock prices and a more favorable economic outlook, according to the administration.
  • California’s progressive tax system leaves the budget especially sensitive to market swings, with the top 1% of ...

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