Governor Newsom signs balanced state budget that cuts taxes for vets, fully funds free school meals, builds more housing, & creates jobs

Pro Tem Mike McGuire says: “The State is delivering a responsible on-time budget in a challenging year focused on fiscal restraint and investing in the people and programs that make this State great. This budget prioritizes record funding for our kids and public schools, protects access to health care for millions of the most vulnerable, and will create more housing at a scale not seen in years. Thanks to this budget agreement, the state will help get more folks off the streets and into permanent shelter, and we’ll expand the ranks of CalFire, deploying hundreds of additional full-time CalFire firefighters, which will save lives and make us all more wildfire safe. And this agreement helps prepare our state for the ongoing chaos and massive uncertainty caused by the Trump administration. Thank you to our Senate Budget Chair Scott Wiener, Speaker Rivas and Governor Newsom and their staffs for their hard work for the people of California.”

Speaker Robert Rivas says: “This is an incredibly difficult time for Californians. Trump is undermining our economy with reckless tariffs, harsh cuts, and ICE agents terrorizing our communities. At a moment when so many are already struggling, he’s adding fear and instability. In contrast, Democrats have delivered a budget that protects California. It cuts red tape to build more housing faster — because housing is the foundation of affordability and opportunity. It preserves critical investments in health care, women’s health, education, and public safety. And it honors our commitment not to raise taxes on families, workers, or small businesses. In unprecedented times, under painful circumstances, Democrats are delivering for Californians.”

Tax cuts for vets, smaller class sizes, free school meals

The budget reflects a shared commitment to protect opportunity and improve affordability in California, in the face of targeted attacks by the Trump administration. The budget makes historic investments in public education — from universal transitional kindergarten and free school meals to expanded before and after-school programs, summer school, smaller class sizes, and strengthened career training and higher education. The budget demonstrates the state’s commitment to honoring veterans by creating tax cuts for military retirees, recognizing their service and supporting their financial security. 

Lowering prescription drug costs, protecting reproductive care, and safety nets 

The budget preserves key health care programs for Californians targeted by Republicans. It preserves vital safety net programs, including in-home supportive services and women’s reproductive health. As part of the budget, the Governor is also expected to sign legislation protecting access to health care, license and regulate Pharmacy Benefit Managers for the first time, increasing transparency and accountability in the pharmacy supply chain. The legislation also expands CalRx’s authority to procure brand-name drugs and respond to politically motivated supply disruptions, helping shield access to critical medications like mifepristone.

Lights, camera, JOBS

The budget protects California’s position as the 4th largest economy in the world – supporting business and continued economic growth, including California’s iconic film industry. Next week, the Governor is expected to sign additional legislation as part of the expansion of the film and TV tax credit program — further catapulting the program’s impact to $750 million a year.

Trump’s economic assault

The balanced budget comes as California continues to confront significant fiscal pressures fueled by the Trump administration’s reckless economic and immigration policies. According to the California Department of Finance, Trump’s tariff regime is projected to cost the state an estimated $16 billion in lost General Fund revenue through the next fiscal year. And a new study released June 17 by the Bay Area Council Economic Institute, in collaboration with UC Merced, found that Trump’s mass deportations could slash $275 billion from California’s economy, eliminate $23 billion in annual tax revenue, and severely disrupt key industries such as agriculture, construction, and hospitality. 

In the face of these mounting challenges, the Governor issued a proclamation to access state reserves. This responsible and balanced budget protects Californians, creates more housing, preserves core programs, reinforces fiscal discipline, and invests in the state’s long-term economic strength.

The Governor today announced signing the following bills:

• AB 102 by Assemblymember Jesse Gabriel (D-Encino) – Budget Act of 2025.
• AB 118 by the Committee on Budget – Human services.
• AB 121 by the Committee on Budget – Education finance: education omnibus budget trailer bill.
• AB 123 by the Committee on Budget – Higher education budget trailer bill.
• AB 134 by the Committee on Budget – Public Safety.
• AB 136 by the Committee on Budget – Courts.
• AB 143 by the Committee on Budget – Developmental services.
• SB 101 by the Senator Scott Wiener (D-San Francisco) – Budget Act of 2025.
• SB 103 by the Senator Scott Wiener (D-San Francisco) – Budget Acts of 2022, 2023, and 2024.
• SB 120 by the Committee on Budget and Fiscal Review – Early childhood education and childcare.
• SB 124 by the Committee on Budget and Fiscal Review – Public resources trailer bill.
• SB 127 by the Committee on Budget and Fiscal Review – Climate change.
• SB 128 by the Committee on Budget and Fiscal Review – Transportation.
• SB 132 by the Committee on Budget and Fiscal Review – Taxation.
• SB 141 by the Committee on Budget and Fiscal Review – California Cannabis Tax Fund: Department of Cannabis Control: Board of State and Community Corrections grants.
• SB 142 by the Committee on Budget and Fiscal Review – Deaf and Disabled Telecommunications Program.

The Governor’s signature on the state budget is contingent on the enactment of either AB 131 or SB 131 on Monday, June 30th.

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