# Gov. Newsom, California lawmakers reach a deal on state’s $350B budget. A quick snapshot of what that entails > Source: > Published: 2026-06-27 01:15:22+00:00 **Getting your** [Trinity Audio](//trinityaudio.ai)player ready...Gov. [Gavin Newsom](https://www.ocregister.com/tag/gavin-newsom/) and California’s Democratic leadership said late Friday afternoon they’ve reached [a deal on the state’s $350 billion budget](https://sd21.senate.ca.gov/sites/sd21.senate.ca.gov/files/pdf/FINAL%20BUDGET%20ACT%20%285%29.pdf) — one they said will ensure there is no deficit this year or next. Newsom, along with Senate President Pro Tem Monique Limón of Santa Barbara and Assembly Speaker Robert Rivas of Salinas, said [the plan](https://sd21.senate.ca.gov/sites/sd21.senate.ca.gov/files/pdf/FINAL%20BUDGET%20ACT%20%285%29.pdf) includes two key components: a constitutional amendment meant to [shore up California’s rainy day fund](https://speaker.asmdc.org/press-releases/20260625-legislative-democrats-empower-california-voters-strengthen-rainy-day-fund) and [a bond plan touted as a way to fund housing construction](https://speaker.asmdc.org/press-releases/20260625-assembly-delivers-historic-affordable-housing-bond-build-homes-faster-lower) and expand homeownership opportunities for veterans and middle- and lower-income households. “This budget demonstrates responsible choices that protect our fiscal strength while continuing to invest in what matters most,” Newsom said in a statement. “In California, we support working families, create more opportunity and build safer, healthier communities. That’s how we keep California the engine of America’s economy and a place where everyone has the opportunity to succeed.” The budget includes $700 million for affordable housing programs, and another $900 million for the [Homeless Housing, Assistance and Prevention program](https://www.hcd.ca.gov/funding/hhap), which makes grant allocations to cities, counties and continuums of care to tackle homelessness. It also includes $175 million for Legal Aid programs — $80 million more than what was suggested in May’s budget proposal — amid the Trump administration’s ongoing immigration enforcement crackdown. And $50 million was earmarked for Proposition 36 funding. The measure approved by voters in 2024 strengthened certain retail theft and drug penalties. But it also ensured that repeat offenders who need drug or alcohol treatment can receive that therapy or counseling. Lawmakers had [requested about $400 million](https://www.ocregister.com/2026/03/16/california-lawmakers-want-say-400-million-for-prop-36-treatment-is-needed-in-the-state-budget/). Additionally, the budget included $300 million to offset healthcare costs expected with the expiration of federal subsidies. And it delayed or maintained many of the Medi-Cal cuts adopted in last year’s budget, including delaying until July 2027 the elimination of full-scope Medi-Cal for asylees and victims of human trafficking or domestic violence. The budget also allocates $90 million to support distressed hospitals, with another $250 million to help specific public hospitals. “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,” said Limón. “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,” she said. *This is just an early look at the budget. Please check back in the coming days as we continue to explore the $351.7 billion spending plan.*