Newsom, Legislature Reach Deal on $355.9 Billion Budget That Protects Health Care; Averts Deficits for Two Years
Gov. Gavin Newsom and Democratic legislative leaders announced a final agreement June 26 on California’s $355.9 billion 2026–27 state budget, saying the spending plan preserves health care and other essential services while eliminating projected deficits through the next two fiscal years.
The agreement between Newsom, Senate President Pro Tempore Monique Limón (D-Santa Barbara), and Assembly Speaker Robert Rivas (D-Hollister) balances the budget while maintaining investments in health care, education, housing, public safety and other priorities despite continued economic uncertainty and federal funding challenges.
“A balanced budget isn’t an end in itself—it’s how we deliver for Californians,” Newsom said. “This budget demonstrates responsible choices that protect our fiscal strength while continuing to invest in what matters most. In California, we support working families, create more opportunity, and build safer, healthier communities.”
The budget includes $300 million to lower health care costs, preserves $0 monthly health plans for many lower-income Californians, and helps offset higher insurance premiums resulting from the expiration of enhanced federal Affordable Care Act subsidies. It also protects funding for behavioral health programs and continues implementation of Proposition 1.
Other major investments include a record $2.4 billion in ongoing funding for special education, $5 billion for TK-12 schools, $500 million in Low-Income Housing Tax Credits, $200 million for affordable multifamily housing, a $100 million Disaster Rebuilding Fund, and new funding to strengthen election security, voter outreach and protections against misinformation. The agreement also preserves free school meals, universal transitional kindergarten, universal preschool, summer school programs and childcare slots.
Limón said lawmakers worked to shield Californians from federal spending reductions while strengthening the state’s finances.
“Today’s 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 responsible budgeting choices,” Limón said. “I am also proud that the Senate was able to secure critical funding for childcare slots, safeguard access to care, and take significant steps toward ensuring large corporations pay their fair share.”
Rivas said the budget “protects health care, preserves food programs, invests in housing at record levels and builds reserves to fight back no matter what Trump and Republicans throw at us.”
Asm. Mike Gipson: California Hospitals Are Entering One of the Most Dangerous Eras in History
California hospitals are facing one of the most precarious periods in decades, Assemblymember Mike Gipson (D-Carson) warned as lawmakers debated Assembly Bill 109, the state’s 2026-27 budget bill.
Included in that bill — and the Senate version of it, Senate Bill (SB) 101– is one-time emergency assistance of $50 million designed to help hospitals in financial distress to stabilize and continue providing care to patients across the state. The bill also allocates an additional $250 million to help California’s 17 public hospital systems cope with mounting losses tied to federal health care cuts.
Speaking on the Assembly floor, Gipson said the legislation is critical to preserving access to health care, particularly for vulnerable communities that depend on public hospitals and Medi-Cal services.
“Our hospitals are entering one of the most dangerous eras that anyone has ever seen, at least in my lifetime,” said Gipson. “Assembly Bill 109 helps preserve access to health care by providing much needed relief to hospitals across California that are struggling to remain financially viable and to continue to serve their communities.”
Gipson said the financial support to hospitals will help them prepare for future emergencies while protecting access to care.
Drawing on his experience representing South Los Angeles during the COVID-19 pandemic, Gipson described the devastating toll the virus took on his district.
“I’ve seen the coronavirus devastate the Black and Brown communities,” he said. “I’ve seen bodies … piling up in refrigeration systems and delivered in trucks.”
Without the funding, Gipson warned, hospitals would be less prepared to respond to future public health emergencies, increasing the risk of preventable deaths and worsening health outcomes for patients across California.
Gipson, a member of the California Legislative Black Caucus (CLBC), added that the state budget helps prepare counties for potential impacts from HR 1, arguing California must protect vulnerable residents from anticipated federal policy changes.
Gipson pointed to the financial struggles faced by Martin Luther King Jr. Community Hospital, saying he has repeatedly spoken on the Assembly floor over six terms about the importance of preventing hospital closures in his district.
“We cannot afford to let any hospitals close,” Gipson emphasized. “Assembly Bill 109 helps all Californians at all hospitals.”
Following passage of the budget, Gipson said preserving the hospital funding in AB 109 “meant the absolute world to me.” Assemblymember pushes for funding for hospitals and Medi-Cal in budget bill.
Report Examines Link Between Low Earnings and Incarceration Rates
Low earnings and unstable employment before incarceration may play a larger role in the cycle of imprisonment than previously understood, according to a new report from the Public Policy Institute of California (PPIC) that tracks the work histories of nearly 170,000 people released from state prisons.
The report, Employment Before, During, and After Prison in California, found that many people entering prison had weak ties to the labor market, often working temporary, low-paying jobs that failed to lift them above the federal poverty line. Researchers said the findings underscore the need for stronger education, workforce development and employment programs to improve long-term economic outcomes and reduce barriers to successful reentry.
The study analyzed employment records for people released from California prisons between 2015 and 2019, examining their work histories before incarceration, jobs held while in prison and employment after release. Researchers found that nearly half of those studied never held a job outside prison during the period examined, while one in four had no recorded employment before, during or after incarceration.
“Policymakers have long sought to promote employment among released prisoners through policies and programs that reduce incarceration and broaden access to the labor market,” researcher Heather Harris stated. “This descriptive report provides previously unavailable information about employment before, during, and after incarceration among released prisoners with the aim of highlighting opportunities for improvement.”
Before incarceration, about one-third of employed individuals worked temporary jobs. After release, that share increased to 42 percent, suggesting employment remained unstable even after returning to the community. The report also found that prison jobs generally paid about 40 percent less than the national average, and nearly one-third of incarcerated workers received no wages at all.
Researchers found that low earnings were common throughout the employment histories they examined. Only 28 percent of people employed before incarceration earned more than the federal poverty threshold in at least one year. Although that share rose to 45 percent after release, many workers continued to earn too little to achieve lasting financial stability.
The report also identified significant disparities, with Black workers earning an average of 38 percent less than White workers and women earning about 20 percent less than men.
Despite those challenges, the report identified several factors associated with stronger employment outcomes. Individuals who worked before incarceration were nine times more likely to find employment after release, while prison jobs, vocational education, college coursework and substance use disorder treatment were all linked to improved employment prospects.
“Our findings suggest that improving access to education, job training and employment opportunities before, during and after incarceration could strengthen labor market outcomes for formerly incarcerated Californians,” Harris stated.
The researchers said expanding evidence-based workforce and education programs could help break the connection between persistent low earnings and incarceration, while improving economic mobility and reducing the likelihood of future justice system involvement.
California Dem Party Is Holding Its Summer Executive Board Meeting July 31-Aug. 2
The California Democratic Party is set to hold its 2026 Summer Executive Board Meeting from July 31 through Aug. 2 at the Sheraton San Diego Hotel & Resort, bringing together party leaders for three days of organizing, voting, and planning ahead of the November election cycle.
The meeting will gather Executive Board members and standing committee members to conduct official party business, including committee meetings, training sessions, and a Sunday General Session where credentialed members will vote on party matters. Party officials say the event is designed to coordinate strategy as Democrats in California look to strengthen voter outreach efforts and support national goals, including efforts to regain control of the U.S. House of Representatives.
Online registration and credentialing for Executive Board attendees is currently open and will close at 5 p.m. on July 8. Observer credential requests for non-board members close earlier, on July 2 at 5 p.m. Party officials are encouraging attendees to complete registration online in advance to streamline on-site credential pickup.
Executive Board members are required to pick up physical credentials in person during registration hours to be eligible to vote. Registration fees include $85 for Executive Board members, $80 for 2026 DSCC dues, and $165 for combined dues and registration. Standing committee members may also register for $85, while non-board members can attend the Sunday General Session by purchasing a $95 observer pass.
The party is also organizing volunteer opportunities during the weekend, including an in-person phone bank focused on voter outreach efforts. Organizers say the activity is part of broader efforts to mobilize voters ahead of the general election.
Several logistical details remain in progress, including the release of the full executive board agenda, travel accommodations information, and Sunday voting procedures. A proxy submission portal is currently open for members unable to attend in person.
The hotel room block at the Sheraton San Diego Hotel & Resort has already sold out, though attendees can still access discounted parking rates during the event.
Party officials note that caucus meetings, standing committee sessions, and training events will remain open to all Democrats and do not require credentials. However, only credentialed members and approved observers will be allowed to participate in the formal Sunday General Session.
Newsom Green Lights Measure Placing $11.25 Billion Housing Bond on November Ballot
California Gov. Gavin Newsom has signed a measure placing an $11.25 billion Veterans and Affordable Housing Bond Act on the November 2026 ballot, setting up a statewide vote on one of California’s largest housing investment proposals in years.
The agreement between the governor, the Assembly and the Senate would fund affordable housing construction, preservation, and homeownership programs, with a focus on veterans, working families, and lower-income Californians. If approved by voters, the bond would finance both rental housing and down payment assistance programs, along with housing for farmworkers, students, tribal communities, and people experiencing homelessness.
In announcing the deal, Newsom emphasized long-standing concerns over housing access and affordability.
“Today’s agreement builds on our work with the Legislature to expand opportunity and make homeownership and affordable housing more attainable for Californians,” said Newsom. “For far too long, our state failed to build enough housing to meet the needs of growing families and communities.”
He added that the proposal is intended to give voters a direct role in expanding housing access. “We’re once again turning the page on decades of inaction and making bold investments needed to tackle one of our state’s greatest challenges,” he said.
Assembly Speaker Robert Rivas (D-Hollister) said the measure aligns with the goals of the state’s broader housing strategy.
“This is California delivering,” Rivas said, pointing to recent efforts to speed up construction and expand housing supply.
Senate President pro Tempore Monique Limón (D-Santa Barbara) said the agreement reflects bipartisan legislative coordination on housing policy.
“The Legislature continues to prioritize access to housing in the Golden State for everyone,” she said.
The bond includes $1.25 billion in self-supporting CalVet home loan bonds and $10 billion in general obligation bonds backed by voters. Officials say it is designed to leverage additional federal, local and private funding to expand housing production.
