Every January, the Governor releases a budget proposal that kicks off negotiations with the Legislature over everything from how we fund our schools to public safety. This year, through the aftermath of the devastating Palisades and Eaton wildfires and the ongoing economic assault on California from the federal government, We worked together to pass a budget enacting a responsible, balanced spending plan that safeguards California’s values while maintaining our state’s long-term fiscal health.
The state government’s budget and accompanying trailer bills include new, landmark policies that will accelerate housing production and boost affordability in communities across the state — addressing California’s most urgent challenges.
In response to Governor Newsom’s proposed cuts the Legislature successfully pushed back against drastic reductions to health and human services programs. The final state budget signed by the Governor represents a negotiated compromise.
In total, the Budget Act of 2025 contains $321.1 billion in total spending, including $228.4 from the General Fund. The budget is balanced with total reserves of $15.7 billion, including $11.2 billion in the Rainy Day Fund and $4.5 in the regular reserve.
The budget reflects a shared commitment to protect opportunity and improve affordability in California, in the face of targeted attacks by the Trump Administration.
Below is a brief summary of the various components of the state budget plan that I would like to highlight for all of you.
Education
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.
Healthcare
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 care.
As part of the budget agreement, 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.
Entertainment Industry
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. The budget includes an expanded film and television tax credit totaling $750 million a year. In addition, we’ve worked to pass legislation to modernize the tax credit to keep us more competitive with other markets like Georgia and New York so that we can keep production, and all of the economic benefit to surrounding businesses, here at home.
In California, our budget is a reflection of our values. We’re investing in our communities, protecting vital services, supporting neighborhoods devastated by the January wildfires, growing jobs, and addressing the affordability crisis with real reforms to bring down the cost of housing.
However, all of that work to invest in California and maintain a healthy reserve fund is facing a looming threat. The federal administration has repeatedly taken action that puts Californians at risk. They’ve refused to release disaster funds to help us rebuild after the wildfires. They’re holding billions in funding for education hostage as schools across the state are gearing up for a new school year. And, they’ve passed legislation that will cut health care for millions.
All of these actions could blow a gaping hole in our budget and roll back years of progress.
Additional Resources
If you would like to learn more about the approved Budget Act of 2025, including additional information about the forthcoming budget trailer bills, I strongly encourage you to read more at:
As always, please do not hesitate to contact our district office if you have questions or if we can be of assistance. Our phone number is (818) 558-3043, and email address is Assemblymember.Schultz@Assembly.ca.gov.
