Newsom Signs Zero‑Deficit California Budget Backed by $6 Billion‑Plus Reserve

Overview

• Governor Gavin Newsom signed the fiscal 2026–27 budget that leaders negotiated as a zero‑deficit plan with a retention account holding more than $6 billion in projected revenue.
• The plan locks in large education investments, including universal free school meals, $5 billion for general education, $2.4 billion for special education and expanded preschool and summer school access.
• Lawmakers set aside $300 million to lower family health‑care costs and preserved no‑premium monthly coverage for many low‑income Californians to offset expiring federal subsidies.
• The package cuts LLC taxes by 50% for many new small businesses for three years while tightening limits on unrestricted corporate tax credits to shift benefits toward smaller firms.
• The budget also speeds housing production with $500 million in low‑income housing tax credits, creates a $100 million reconstruction fund for underinsured homeowners and provides $29 million to speed ballot counting plus funds for countering election disinformation.