California Senate passes $355.9 billion AB 109 budget package after hours of floor debate

The California Senate voted 28–9 on June 16 to pass AB 109, the 2026 budget act, which the bill’s sponsor said totals $355.9 billion in spending and $253.0 billion from the general fund. Senator Anna Laird, the budget chair, framed the package as a balanced plan that creates $36.5 billion in reserves and cuts the structural deficit nearly in half while funding hospitals, childcare and education.

"All told, the AB 109 budget package includes $355,900,000,000 in total spending, $253,000,000,000 of which is the general fund," Senator Laird said, asking colleagues for an aye vote. She highlighted forgivable loans and supports for distressed hospitals and a new "Be Home Soon" program intended to transition older adults and people with disabilities from hospitals back to community care.

Opponents said the package fails to solve long‑term fiscal problems and will lead to higher costs for residents and businesses. "California doesn't have a revenue problem. It does have a wasteful spending problem," said Senator Mark Strickland, who urged a no vote and argued the budget leaves the structural deficit for future legislatures to address.

Several senators raised specific concerns. Senator Choi said the budget relies on an MCO tax on commercial health plans that she estimated would increase premiums by roughly $1,500,000,000 for businesses and people. Senator Durazo criticized the package for not restoring Medi‑Cal coverage to certain immigrant groups and warned that delaying restorations risks removing people from care. Senator Scott Wiener urged continued negotiations to protect public‑transit funding and said cuts could lead to service reductions.

Supporters pointed to program wins: the budget preserves and expands childcare with 22,770 new slots for 2026–27, provides up to $190 million in forgivable loans for distressed hospitals and $250 million to support public hospitals, and restores more than $250 million to community colleges within Proposition 98. It also funds $900 million for affordable housing and homelessness programs and includes $50 million earmarked for Proposition 36 implementation.

Senator Laird said the plan includes $5 billion in new revenues and that trailer bill details remain to be negotiated. "This budget is balanced for two years," she said, adding that the package aims to triage the effects of federal cuts to health care and other services.

The Senate’s passage advances the budget to the next steps of negotiation and reconciliation with the Assembly and the governor. The chamber’s action does not itself finalize trailer bill language or revenue measures that sponsors said will follow in the budget process.

The Senate proceeded to other floor business and adjourned, scheduling its next floor session for June 18 at 9 a.m.