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Newsom Adds Tech Taxes to Shield $100 B Budget Gap

5/20/2026

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Story summary
  • The Legislative Analyst’s Office warned California’s $350 billion budget relies on AI revenue and market gains, risking a shortfall of up to $100 billion if markets fall.
  • Governor Gavin Newsom presented a balanced two-year budget that adds taxes on technology firms and caps corporate credits, raising $2.6 billion annually.
  • The Department of Finance said the plan will bank the surplus, limit spending, and raise Medi-Cal premiums for immigrants to $50 a month.