California Leaders Announce Balanced Budget Agreement, Protecting Affordability, Health Care, Housing, Schools and Essential Services

SACRAMENTO - On Friday, Speaker of the Assembly Robert Rivas, Governor Gavin Newsom and Senate President pro Tempore Monique Limón announced a three-party agreement on California's 2026-27 state budget, delivering a balanced spending plan with zero deficit that protects Californians while maintaining the state's long-term fiscal stability amid continued economic uncertainty and President Trump's politically motivated attacks on the state, including the withholding of state funding.

The agreement builds on California's strong fiscal foundation by preserving reserves, maintaining responsible budgeting practices, and continuing strategic investments that protect health care access, defend essential safety net programs like food assistance, and make historic investments in affordability and housing.

What California's Leaders Say About The Balanced Budget

Speaker Robert Rivas

"Working families deserve a budget that has their back - and that's exactly what California is delivering. We're protecting health care, preserving food programs, investing in housing at record levels and building reserves to fight back no matter what Trump and Republicans throw at us. While Washington's agenda drives up prices and guts critical programs, California is focused on what matters: Real solutions that put affordability first."

Governor Gavin Newsom

"California's fiscal responsibility and bold investments in our future go hand in hand. This budget agreement protects the progress we've made, safeguards the state's financial stability, and continues our investments in the people that make California the engine of our nation's economy. Together, we've built one of the strongest fiscal foundations in state history, helping us remain prepared to meet today's challenges and continue to lead into the future."

Pro Tem Monique Limón

"In January, California was faced with a difficult fiscal outlook that prompted the legislature to take a hard look at the financial future of the Golden State. Despite continued funding cuts from the federal administration, California was able to mitigate the impacts to programs that millions rely on. This budget agreement reflects our commitment to protect core programs and address our short and long-term financial future by building up our rainy day fund and making balanced budget choices. I am also proud that the Senate led on securing critical funding for childcare slots, safeguarding access to healthcare, and laying the foundation to ensure large corporations pay their fair share for healthcare. Thank you to the Governor and Speaker of the Assembly for their partnership to deliver a strong foundation for our future."

Assembly Budget Chair Jesse Gabriel

"California is delivering a budget rooted in compassion, fiscal responsibility, and opportunity for all. While the Trump Administration and Congressional Republicans continue to make life harder for working families, our state budget prioritizes healthcare, housing, and critical programs that working families and our most vulnerable communities rely on. I'm grateful to Governor Newsom, Speaker Rivas, Pro Tem Limón, and our Assembly Budget Sub Committee Chairs for working collaboratively to craft a budget that reflects our values and uplifts California families."

Historic Affordable Housing Wins, Saving More For Rainy Days

Earlier this week, Speaker Rivas and California leaders announced two major agreements that form key pillars of the broader budget package:

• The historic Veterans and Affordable Housing Bond Act of 2026 to help fund housing construction, preserve affordable housing, and expand homeownership opportunities, including assistance for veterans, middle- and lower-income households, affordable rental housing, and interim and supportive housing for people experiencing homelessness.
• The Save for California's Future Act, a constitutional amendment that strengthens the state's Rainy Day Fund and modernizes California's fiscal safeguards to better prepare for future economic uncertainty. The Save for California's Future Act will also help protect schools and businesses by reducing unemployment insurance trust fund liabilities and potential costs for employers.

Delivering on Affordability, Health Care, Housing and More

Among its key priorities, the balanced budget agreement:

• Fights to protect Medi-Cal, dental care and health access for immigrant communities
• Funding for community hospitals, which face fiscal challenge due to Trump cuts
• $300 million to backfill health care premiums due to Trump eliminating federal subsidies
• Funds in-home care and services for seniors and people with disabilities
• Tens of millions of dollars for immigrant legal services
• $900 million to prevent street homelessness and support unhoused residents
• Hundreds of millions of dollars invested in low-income housing and multi-family homes
• Funding for food and diaper banks
• Record funding for students and per-pupil spending, along with a significant cost-of-living investment for school districts
• Fully funds the UC and CSU system
• Maintains a balanced budget - not just for the coming fiscal year, but the following year as well - by setting aside more than $6 billion in anticipated revenues in a holding account.
• Continues investments in public safety and efforts to improve community safety across California, including treatment and funding for crime victims
• Maintains California's leadership on climate resilience, clean energy, and wildfire preparedness, fully funding CalFire
• New investments to safeguard and speed up elections - increase staffing, voter outreach and education, and combat mis- and disinformation.
• The agreement also reflects California's continued commitment to responsible fiscal management, preserving the state's ability to respond to future economic conditions while protecting the essential programs Californians rely upon.

The Governor, Senate, and Assembly will continue working together through the constitutional budget process in the coming days.