---
title: "Newsom Signs a $352 Billion California Budget, a Capstone Before He Leaves Office"
description: "Gov. Gavin Newsom has signed California's roughly $352 billion spending plan for the coming fiscal year, closing what had been a sizable budget gap largely through new revenue rather than deep cuts — and framing the package as a capstone before he leaves office in early 2027."
category: "Los Angeles"
category_url: https://herald.la/category/los-angeles
author: "Lucía Fuentes"
published: 2026-06-30T16:48:00.000Z
updated: 2026-06-30T16:48:00.000Z
canonical: https://herald.la/article/newsom-signs-a-352-billion-california-budget-a-capstone-before-he-leaves-office
tags: ["California", "budget", "Gavin Newsom", "Medi-Cal", "state government", "Sacramento"]
---
# Newsom Signs a $352 Billion California Budget, a Capstone Before He Leaves Office

Gov. Gavin Newsom has signed California's roughly $352 billion spending plan for the coming fiscal year, closing what had been a sizable budget gap largely through new revenue rather than deep cuts — and framing the package as a capstone before he leaves office in early 2027.

California's budget arrived closer to balance than many had feared — and with Gov. Gavin Newsom's stamp on what may be one of his last spending plans.

## A gap closed mostly with revenue

The roughly $352 billion plan for fiscal 2026-27 closes a projected shortfall largely through new revenue rather than the deep program cuts budget-watchers had braced for, [ABC30 reported](https://abc30.com/post/newsom-signs-352b-spending-plan-reflects-signature-policies-before-he-leaves-office/19421827/). According to that reporting, the turnaround leaned on a restructured health-care provider tax, a new sales tax on certain software, and limits on some corporate tax breaks, helped along by stronger-than-expected income-tax receipts tied to a booming tech sector. Republicans were skeptical of the "balanced" label; state Sen. Roger Niello argued Newsom was "just leaving us with his tab," contending the fixes are temporary and leave a structural gap for the next governor.

## Health care: delayed, not resolved

The most contested terrain was Medi-Cal, the state's Medicaid program covering millions of low-income Californians. Lawmakers agreed to delay — but not reverse — a proposed rollback of dental benefits for low-income immigrants in the country illegally, and set aside a plan to raise certain monthly premiums. Advocates welcomed the reprieve; some Democrats called it incomplete. "This is a budget that bought time: Medi-Cal delayed, not resolved," state Sen. María Elena Durazo said, per ABC30.

## What it funds

On the spending side, the plan reflects familiar Newsom priorities: roughly 23,000 new subsidized child-care slots, continued free school meals, and expanded broadband, while preserving previously enacted minimum-wage increases for fast-food and health-care workers. Some climate spending decisions, including for the cap-and-trade program, were deferred to the next administration. The budget also set aside funds to modernize vote-counting equipment and support voter education.

## A parting argument

Newsom, who is term-limited and leaves office in January 2027, cast the budget as a rebuttal to critics of progressive governance. "To every other state across our country — come to California," he said, per ABC30, presenting the plan as evidence that social investment and fiscal discipline can coexist. The governor has not ruled out a national run, and allies describe the budget as part of cementing his record. His successor will be chosen in a closely watched race. The same week, Newsom also signed a separate measure narrowing the state's mental-health diversion program, [CalMatters reported](https://calmatters.org/justice/2026/06/mental-health-diversion-new-law/) — one of a cluster of end-of-session actions shaping his final stretch in office.

## Sources

- [Newsom signs $352B spending plan that reflects his signature policies before he leaves office](https://abc30.com/post/newsom-signs-352b-spending-plan-reflects-signature-policies-before-he-leaves-office/19421827/)
- [Newsom signs law limiting mental-health diversion](https://calmatters.org/justice/2026/06/mental-health-diversion-new-law/)