SACRAMENTO — Gov. Gavin Newsom on Monday signed his final state budget as governor, a $351.7-billion spending plan that seeks to uplift the poorest Californians through a tax system reliant on the stock market gains of the wealthy.

In a video message, Newsom extolled free school meals, universal transitional kindergarten, 130,000 subsidized childcare slots and other accomplishments in his tenure at the state Capitol, a period in state history marked by a dramatic expansion of state government and over $100 billion in increased spending.

“Over the past eight years, we built great things for the people of California — some of the boldest actions any government in this country has taken in a generation,” Newsom said. “And we did this without breaking the bank. We did this by design.”

The agreement ends weeks of lobbying by outside interests and negotiations among lawmakers and the governor at the state Capitol about how to handle a surge of income tax collected on stock market gains related to artificial intelligence.

Economists have warned that the revenue bump is potentially temporary and analysts say the growth in state spending could leave California in a challenging position if the economy declines.

Assemblymember David Tangipa (R-Fresno) agreed with Democrats that the budget is “compassionate.”

“My fear is that it’s not too much of a competent budget, and the budget continues a pattern that Californians know all too well: Spend now, justify it later, and hope somebody else pays the bill,” he said during a floor debate Monday.

Here’s what you need to know about the spending plan, which takes effect July 1.

Who decides the state budget?

The simplest answer is: Democrats. California voters have elected Democrats to represent 30 of the 40 seats in the Senate and 60 seats of the 80 seats in the Assembly. The budget was passed through a majority vote in each house of the Legislature and signed by Gov. Gavin Newsom, also a Democrat.

A more complex answer is that the budget is a product of dozens of legislative hearings, millions of dollars spent on lobbying by outside interests, talks among lawmakers and the governor and ultimately subject to the same political dynamics that rule the Democratic party.

Senate President Pro Tem Monique Limón (D-Goleta) and Assembly Speaker Robert Rivas (D-Hollister), in consultation with the chairs of the budget committees, represent their Democratic caucuses and reach a final agreement on the details of the spending plan with Newsom. In reality, staff members for the three parties handle most, if not all, of the back of forth negotiations to get there.

Union leaders seeking better pay, working conditions, benefits for workers and opportunities to expand their ranks are often brought in to consult or hammer out thorny deals as business groups try to fight off more regulations, taxes and costs, and support policies that increase their financial performance.

Democrats are spending more than ever before. How is that possible?

The Legislative Analyst’s Office, the nonpartisan fiscal advisor for lawmakers, recently examined the increase in state spending since 2019-20, Newsom’s first full year in office.

Between the budget approved that year and the spending proposal Newsom unveiled in January, spending from the state’s main operating fund had grown by over $100 billion, or 70%. That was largely by a 60% increase in revenue during that time. California typically operates with a spending deficit because Democrats spend more money than the state brings in.

The LAO found that the increase in spending stemmed from the growing cost of sustaining programs and services that were already in place when Newsom took office. About 30% of the remaining spending growth was categorized as new, either by newly created programs or the expansion of existing services.

Among the report’s conclusions: California could not afford the programs that predated Newsom and the ones he and the Legislature adopted.

To balance the budget over the last few years, Newsom and lawmakers have dipped into the state’s reserves at a time when California is experiencing strong revenue growth, which the LAO has cautioned against. Democrats have also increased taxes on businesses, paid for programs out of other funds and suspended reserve deposits among other solutions.

This year, the state budget places $6.4 billion in higher than expected revenue into a temporary holding account to knock down a deficit and balance the budget through 2027-28.

Democrats are pursuing a change to the state constitution on the November ballot that would allow them to set aside more money in years of good revenue growth to prevent cuts in future downturns.

Where is the money going?

Education and Medi-Cal are the two largest costs for the state.

Medi-Cal is the state’s version of subsidized health insurance for low-income Californians and provides medical, dental and vision care for an estimated 14.5 million people, or about one-third of the state population.

The federal government pays for more than half of the cost of the program. California is expected to spend about $50 billion from the general fund next year out of a total estimated at more than $220 billion in costs shared between the state and federal government, according to the LAO. State taxes and fees on providers also help fund Medi-Cal.

Overall, Medi-Cal costs more than any other state program and takes up about 40% of total spending, including federal funds the state receives, according to the LAO.

Spending on Medi-Cal has more than doubled over the last 10 years, which the LAO attributes to an increase in costs per enrollee, more enrollees and a greater share of seniors seeking care, among other factors.

Under Newsom, California has expanded Medi-Cal, including offering coverage to include all immigrants regardless of their immigration status, which the governor said has dropped the state’s uninsured rate down to 5.9%

The cost of Medi-Cal has grown beyond what Democrats expected and resulted in Newsom suggesting spending cuts.

The final budget agreement rejects a call by Newsom to lower the asset limit to $2,000 now and instead lowers it to $21,000 in 2027-28 to be eligible for Medi-Cal. The Legislature also delayed the governor’s proposal to reduce dental coverage and shift asylum seekers and other immigrants to restricted scope Medi-Cal, according to Jason Sisney, the lead budget advisor for the Assembly who posts about the budget on Substack.

The budget includes Newsom’s proposal to shift enrollees with unsatisfactory immigration status, a term that includes undocumented immigrants and others, from managed care to fee-for-service to save costs.

Under Proposition 98, approved by voters in 1988, California has a minimum funding guarantee for schools and community colleges and dedicates roughly 40% of general fund revenue to education.

Sisney said the budget increases the Local Control Funding Formula by $2.2 billion and provides historic general fund per pupil spending of $21,148. Support for special education also grew by $1.8 billion.

The California Community Schools Partnership Program received a $1-billion boost and Democrats directed $2.8 million in additional funding to the program that provides free meals for school children.

The budget also establishes 22,770 new slots for free or reduced childcare, which Newsom had proposed decreasing.

OROVILLE — Bradley Scott Sayer was charged with two counts of first-degree murder and discharge of firearm with injury during his arraignment Thursday at the Butte County Superior Court.

Sayer, 18, is the suspect in the Chico library shooting on Monday in which two men were killed, and he could face life in prison. If convicted, Sayer is facing the highest penalty for capital murder with special circumstances, which would be life in prison without the possibility of parole. Butte County District Attorney Mike Ramsey, who is the prosecutor of the case, said the court is not seeking the death penalty.

Sayer was not given bail, as Ramsey said the court felt Sayer was “too dangerous.” Ramsey also said Sayer is on suicide watch in at the Butte County Jail.

“We felt that it would be too dangerous to let him go at this juncture,” Ramsey said. “He planned a mass shooting, and there’s no reason to believe that if he was let go, that he wouldn’t continue to do that.”

California State Senator Scott Wiener was harassed for his stance on Gaza during the San Francisco Trans March on Friday, to the point where it was no longer safe for him to remain, Wiener said. 

A group of people were so “physically and verbally aggressive that it was impossible for me to safely remain in the park,” Wiener stated, adding that this was the first time he did not participate in the march.

Wiener was surrounded by people who made statements about his “Israeli handlers, among many other inaccurate, extreme, and vile statements,” Wiener said.

“We f***ing hate you. You stopped being queer the moment you started supporting Israel,” one person yelled in a video later shared on social media.

Wiener stated that while he has no objection to anyone disagreeing, opposing, or protesting him, the “harassment, including cornering me, touching me, or trying to physically bully me out of a public event, that crosses a line.” 

“In San Francisco, we’re better than that,” he added.

Mayor Daniel Lurie made a statement on X/Twitter condemning the harassment, calling the language used “targeted, hateful, and antisemitic.”

In San Francisco, we welcome disagreement and respectful dialogue around issues many of us feel passionately about – but we cannot allow harassment and threats of violence,” Lurie wrote.

The California State Senate Democratic Caucus also released a statement on X, condemning the hate Wiener received. 

“The harassment and violence shown from yesterday’s march in San Francisco towards Senator Scott Wiener is unacceptable and must be called out,” the statement read.

The caucus also pointed to Wiener’s work on legislation “advancing the rights and protections for Transgender, Gender Expansive and Intersex people.”

“The CA Senate Democratic Caucus and CA LGBTQ Caucus jointly denounce the verbal harassment and attacks he experienced,” the statement said.