Gov. Gavin Newsom signed it on Saturday. California's budget will close an estimated $46.8 billion deficit Through $16 billion in spending cuts and temporary tax increases on some businesses.

Lawmakers passed the budget Wednesday following an agreement between Gov. Newsom and legislative leaders that included concessions on both sides and wins on both sides, as both sides were forced to roll back or delay some progressive policies that have been driven by record surpluses during the COVID-19 pandemic for a second straight year.

“This is a responsible budget that invests in the foundational programs that benefit millions of Californians every day while preparing for the future,” Governor Newsom said in a statement. “Thanks to my careful stewardship of the budget over the past few years, we are able to meet this moment while protecting progress on housing, homelessness, education, health care and other priorities that are so important to Californians.”

The deficit is Approximately $32 billion The deficit is expected to widen further this year and then widen further in 2023, pushing the nation's most populous state into a deeper recession. Saturday's signing comes as Newsom and Democratic lawmakers Boast of excess The spending, totaling more than $100 billion, is the product of hundreds of billions of dollars in federal COVID-19 aid and a progressive tax law that has ploughed huge amounts of revenue from California's wealthiest residents.

But the revenue surge was short-lived as an inflation-fueled economic slowdown led to rising unemployment and a slowdown in the tech industry that had driven the state's growth. The Newsom administration badly miscalculated how much extra cash California would have last year because of a seven-month tax-filing extension.

California has historically suffered from large budget fluctuations. Dependence on the wealthiest taxpayers. But those deficits come at a bad time for Newsom, who is gaining national recognition ahead of his presidential run and has been tapped as a top surrogate for President Biden's campaign.

The budget includes an agreement between Governor Newsom and lawmakers to amend the California Constitution to allow the state to set aside more money in reserves to protect against future funding shortfalls.

But Republicans said they were being left out of the negotiations. They criticized a proposed three-year business tax increase on businesses with at least $1 million in revenue that would bring in more than $5 billion in extra revenue for the state next year, and criticized Democrats for some cuts to Social Security.