After legislative leaders and Gov. Gavin Newsom failed to agree on a plan to address California’s projected multibillion-dollar deficit, the Legislature passed a provisional state budget on Thursday, just before the mandatory deadline.

With only a few weeks remaining before the new fiscal year begins on July 1, neither side is publicly disclosing the specific issues that are preventing a final agreement.

Newsom’s office and the Department of Finance did not respond to inquiries about the unresolved differences with the Legislature. Representatives for Senate President Pro Tem Mike McGuire and Assembly Speaker Robert Rivas, who are responsible for negotiating with the governor, were unavailable to the media on Thursday after their members approved a spending plan that is unlikely to be the final budget.

“There’s a common set of priorities,” Assemblymember Jesse Gabriel, an Encino Democrat and head of the Assembly budget committee, stated to reporters after the vote. “The issue is determining the most effective solutions and deciding which programs and services will best address our goals.”

Sen. Scott Wiener, a San Francisco Democrat and chair of the Senate budget committee, did not respond to requests for an interview.

Governor Newsom recently unveiled a plan to address what his administration estimates as a $56 billion funding shortfall over the next two years. His proposal includes drawing from reserve funds, deferring school funding, reducing government positions, and cutting or postponing expenditures for infrastructure, health, and climate initiatives.

A few weeks later, Democratic leaders in the Legislature, which holds supermajorities in both houses, released a counterproposal. Key differences include a call for deeper cuts to prison funding to offset some of Governor Newsom’s proposed reductions in college scholarships for middle-income students, public health programs, subsidized child care slots, and housing development.

The governor and the Legislature also need to decide whether to reallocate billions of dollars initially set aside to increase payments for health care providers serving low-income patients, as Newsom has suggested. Additionally, they must consider whether to further postpone minimum wage increases for health care workers—a move that could save the state billions but faces significant union opposition.

Gabriel defended the process as “exceptionally transparent,” highlighting the numerous legislative budget hearings that provided “a very public vetting of these issues” and “opportunities for Californians to weigh in.” He expressed confidence that the final decisions would not come as a surprise.

He noted, "I believe Californians are well aware of the key issues at stake in this process."

Despite ongoing negotiations over undisclosed details, Democratic lawmakers voted on Thursday to pass their version of the spending plan, driven by the need to approve a balanced budget by the Saturday midnight deadline to ensure their pay. The bill was approved largely along party lines, with a Senate vote of 29–8 and an Assembly vote of 59–14.

Republicans criticized the proposal as misaligned with Californians' needs, objecting to measures such as halting some business tax deductions to generate additional revenue and reversing previous commitments on expanded health care funding. They also criticized the inclusion of billions for the state's troubled high-speed rail project and increased health care access for undocumented immigrants while other programs face cuts.

“This is a shameful budget,” Assemblymember Kate Sanchez, a Republican from Rancho Santa Margarita, declared during the debate. “This budget is heartless, divisive, and completely disconnected from the realities and struggles that Californians are facing.”