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Governor Newsom Unveils Budget Amid $18 Billion Deficit

1/7/2026

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Summary

Story summary

California Governor Gavin Newsom faces an $18 billion budget deficit as he unveils his final spending plan.
The deficit results from higher state spending, lost federal funding, and persistent economic uncertainty.
If no long-term fixes exist, Newsom could face a $35 billion annual deficit by 2027–28.
Advocates urge preserving Medi-Cal and other health care programs facing potential cuts.

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Story summary

California Governor Gavin Newsom faces an $18 billion budget deficit as he unveils his final spending plan.
The deficit results from higher state spending, lost federal funding, and persistent economic uncertainty.
If no long-term fixes exist, Newsom could face a $35 billion annual deficit by 2027–28.
Advocates urge preserving Medi-Cal and other health care programs facing potential cuts.