SACRAMENTO – Governor Gavin Newsom on Jan 10 sent to the Legislature his budget for fiscal year 2025-26 – a balanced funding plan that maintains the state’s fiscal stability while preserving key investments for education, public safety, and wildfire and forest resilience. The budget additionally continues support for robust economic growth, climate action, and high-paying jobs and career development while bolstering strong accountability measures to address housing, homelessness, and mental health care reform.

“The budget I present to you today builds on a framework that balanced the books over two years instead of just one—an unprecedented effort to address the budget shortfall we faced. However, work remains to ensure California’s finances remain in order in the years to come.

In the months ahead, California is facing a new federal administration that has expressed unreserved and uninformed hostility toward Californians, threatening the funding of essential services for political stunts. Continued global instability and the prospect of another downturn in the financial markets, as well as additional pressure on state expenditures, are warning signs to remain vigilant and prudent.

We will continue to assess the state’s ongoing fiscal position and include appropriate adjustments in the May Revision. I look forward to working with new and returning members of the Legislature on a final 2025-26 budget that assures California a strong economic future well into the 21st century” said Governor Gavin Newsom.

The $322.3 billion fiscal plan provides for $228.9 billion in general fund spending and nearly $17 billion in combined reserves – including nearly $11 billion in the state’s Rainy Day Fund and an additional discretionary set-aside of $4.5 billion in the Special Fund for Economic Uncertainties.