Overview
- Newsom’s revised plan, released Thursday, lays out roughly $349–350 billion in spending, claims a $0 structural deficit through July 2028, and parks $9.7 billion in a Surplus Holding Account to steady future budgets.
- The administration reports a $16.5 billion three-year revenue boost driven by stock market gains and AI-linked income taxes, and the state controller says receipts ran $13 billion above January estimates while spending came in $7 billion lower.
- The proposal sets aside $300 million to keep zero-premium health plans for lower‑income Covered California enrollees and reduce costs for others, and creates a $100 million rebuilding fund for homeowners hit by recent wildfires.
- Schools would see large targeted increases that include about $2.4 billion more each year for special education, a $5 billion block grant for teacher training and support, extended literacy and math coaching, and up to 14 weeks of paid pregnancy leave for school employees.
- Policy changes include capping how much large corporations can use in state tax credits starting in 2027, cutting LLC fees in half for new small businesses for three years, and proposing a 7.25% sales tax on digital software beginning in 2027, with negotiations with lawmakers running through mid‑June as the LAO flags revenue volatility risks.