Newsom Unveils $350B California Budget with $3B Deficit

California Governor Gavin Newsom unveiled a proposed $350 billion state budget on Friday, projecting a $3 billion deficit for the upcoming fiscal year starting July 1, a sharp reduction from earlier estimates of $18 billion. The plan, the governor's final one before leaving office next year, emphasizes sustained investments in education and public services while addressing revenue gains from a strong stock market, though it leaves unresolved a $21.3 billion federal loan tied to COVID-era unemployment benefits.

The budget allocates a record $27,418 per K-12 student for education, totaling billions across public schools, the University of California system with $5.3 billion, and community colleges receiving $15.4 billion. Additional funds include $1 billion for schools serving low-income students, $500 million for local homelessness prevention, $195 million in new public safety spending, $3 billion for the state's rainy day fund, and $4 billion for school reserves. Officials attributed the improved deficit outlook to a $43 billion revenue windfall from elevated stock prices and better-than-expected tax collections, particularly from high-income earners whose fortunes are linked...