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California Legislature Passes Budget, Talks with Gov. Gavin Newsom to Continue
Lawmakers kept most proposed service cuts on hold while adding funding for schools, child care and homelessness, and backing $5 billion in new revenues.
California lawmakers approved a $356 billion state budget plan on Monday that diverges from Gov. Gavin Newsom's proposal on healthcare, education, and homelessness spending.
Senate Budget Committee chair Sen. John Laird, a Santa Cruz Democrat, said the plan seeks to "stretch as far as we can" to avoid deep cuts, utilizing a $253 billion general fund with $36.5 billion in reserves.
Rejecting Newsom's proposed reduction of 6,800 child care spaces, lawmakers instead propose 22,000 new slots and $2.7 billion more in funding for schools than the administration included in May.
The Assembly approved three tax measures on Monday, including a software sales tax starting January 2027 and a healthcare provider tax expected to generate roughly $2 billion annually.
Legislators must finalize their agreement with Newsom by July 1 when the fiscal year begins, with disputes remaining over healthcare coverage for undocumented immigrants and homelessness fund allocations.