🏛️ $352B budget signed · Newsom · June 29 · fiscal year begins July 1⚖️ P. v. Espino · prison prior resentencing · SC · July 2📋 Doe v. Marysville · federal dismissal rule · SC · July 2🏠 Huntington Beach anti-SLAPP · Bonta · July 2🧠 AB 46 signed · mental health diversion standard · June 29⚖️ 13 new judgeships · $1.9B courthouses · judicial budget🔒 SB 690 amended · pen register PRA · 4,000+ cases🏛️ $352B budget signed · Newsom · June 29 · fiscal year begins July 1⚖️ P. v. Espino · prison prior resentencing · SC · July 2📋 Doe v. Marysville · federal dismissal rule · SC · July 2🏠 Huntington Beach anti-SLAPP · Bonta · July 2🧠 AB 46 signed · mental health diversion standard · June 29⚖️ 13 new judgeships · $1.9B courthouses · judicial budget🔒 SB 690 amended · pen register PRA · 4,000+ cases
Sunday Edition · Fiscal dawn · Week of June 29 – July 5, 2026
Last ledger
Three days after last week's three-party deal, Governor Newsom signed California's 2026–27 budget on June 29 — a $352 billion spending plan with zero projected deficit, $29 million to accelerate November vote counts, and the fiscal architecture that will outlast his governorship when he leaves office in January.
Signed into law · Chaptered · Fiscal year begins July 1
The budget crosses the finish line — and the fiscal year turns
Last Sunday tracked the June 26 handshake on a $351.7 billion agreement. This week made it law: Newsom signed AB 109, SB 110, SB 111, and a dozen trailer bills on June 29, meeting the constitutional deadline ten days after enrollment. The final package grew slightly to $352 billion, preserves the Medi-Cal assets-cap rejection Democrats fought for, funds election infrastructure ahead of November, and shifts Department of Education oversight to the Governor's office — Newsom's last major fiscal act before a potential presidential run puts California's books under national scrutiny.
No. S286987 · filed July 2, 2026 · authored by Justice Kruger
The Supreme Court held that Penal Code section 1172.75 entitles defendants to full resentencing whenever a now-invalid prison-prior enhancement was imposed in the judgment — even if punishment for that enhancement was struck rather than executed. Jack Espino's 26-year plea agreement included a prison prior whose punishment the sentencing court struck; the trial court had denied resentencing on the theory that section 1172.75 applies only to executed enhancements.
The unanimous opinion rejects the Attorney General's narrower reading and holds that prosecutors cannot withdraw from a plea agreement simply because resentencing reduces the term. The matter remands for full resentencing under current law — expanding the pool of inmates eligible for relief under SB 483's retroactive repeal of prior-prison-term enhancements.
Judges gain broader discretion over mental health diversion
Governor Newsom signed Assemblymember Stephanie Nguyen's bipartisan measure on June 29, modifying the public-safety standard courts apply under Penal Code section 1001.36. Where judges previously asked whether diversion posed an "unreasonable risk of danger," they now evaluate whether community-based treatment would "endanger public safety" — defined as increasing the likelihood of physical injury or serious danger to others.
I appreciate the Governor's and the Legislature's strong commitment to supporting the essential work of the judicial branch. The funding provided for California's courts helps address increased operational costs for trial courts and rising costs for court interpreter services and appellate court-appointed counsel.
Chief Justice Patricia Guerrero — statement on judicial branch budget, June 30, 2026
The signed budget delivers what trial court leaders requested: $1.9 billion to launch four new courthouse projects and continue nine others across Fresno, Kern, Kings, Lake, Los Angeles, Nevada, Placer, San Luis Obispo, Solano, and Yuba counties; $200 million for deferred maintenance; $70 million for increased trial court operations; $20 million for interpreters; a $25-per-hour raise for appellate-appointed counsel; remote proceedings extended through 2031; and funding to begin 13 new judgeships over five years — half of the 26 authorized but unfunded since 2023.
Courthouse construction and bench expansion arrive in the signed budget
The judicial branch's five-year infrastructure plan advances with nearly $2 billion in new courthouse funding. The first three of 13 authorized judgeships begin April 2027 in counties with the greatest workload need. Chief Justice Guerrero had told lawmakers in March that trial judge pay — $244,727 annually — jeopardizes recruitment; the budget did not include the 10% raise judges sought, but operational and construction funding represent the branch's strongest appropriation in recent cycles.
After plaintiffs voluntarily dismissed their federal action twice under Rule 41(a)(1)(B), the district argued the second dismissal barred an identical state court lawsuit — invoking federal claim preclusion to close the courthouse door.
Supreme Court · July 2
Reversed
The Supreme Court held that a second voluntary federal dismissal does not automatically preclude a subsequent state court action on the same claims. The court also addressed whether the district's Eleventh Amendment sovereign-immunity assertion in federal court divested that court of jurisdiction — clarifying that plaintiffs who face immunity barriers in federal forum may still pursue state law claims in state court.
Bonta defeats Huntington Beach's counter-suit over housing enforcement
San Diego County Superior Court granted Attorney General Rob Bonta's anti-SLAPP motion, striking the City of Huntington Beach's cross-complaint accusing the State of acting unlawfully by enforcing Housing Element Law. The court found the city's claims arose from protected state enforcement activity and lacked even minimal merit. Bonta, Governor Newsom, and HCD had sued Huntington Beach in March 2023 for refusing to adopt a compliant housing element; the city responded with delay tactics including this counter-suit.
The State is entitled to seek recovery of attorney's fees. A July 17 hearing will address penalties for continued noncompliance and a pending affordable housing application.
Proposition 1's BHSA framework takes effect in all 58 counties
Governor Newsom announced July 2 that California has completed its transition from the Mental Health Services Act to the Behavioral Health Services Act — the framework voters approved in Proposition 1 (2024). All 58 counties and eligible cities submitted draft implementation plans; the Department of Health Care Services developed a County Policy Manual shaped by more than 1,660 public comments.
Proposition 1 approved
Voters authorize the MHSA-to-BHSA transition and $6.4 billion in behavioral health infrastructure bonds.
Statutory operative date
Counties shift investment frameworks toward housing, substance use treatment, and outcome accountability.
Statewide milestone announced
DHCS confirms all counties advanced BHSA implementation plans aligned with the new County Policy Manual.
California imposes 100% tax on January 6 fund distributions
Governor Newsom signed SB 122 on June 30 as part of the budget package, imposing a 100% California tax on distributions from the $1.776 billion fund President Trump established for individuals connected to the January 6 Capitol attack. The measure ensures California will not provide favorable state tax treatment on those payments — a response proposed after the administration announced the fund, even as a federal judge temporarily blocked its implementation.
Prior law: no specific California tax treatment for January 6 compensation fund distributionsSB 122: 100% California tax on distributions from the January 6 compensation fund — recipients receive no favorable state tax treatment
SB 690 targets explosion of pen register litigation
The Assembly Privacy and Consumer Protection Committee heard amended SB 690 on July 1. Senator Anna Caballero's bill now narrows to California's pen register and trap-and-trace statutes — removing the private right of action and granting exclusive enforcement authority to the Attorney General, with retroactive application to pending cases.
0
Cases at introduction
When SB 690 was first printed, Caballero knew of roughly 600 pending pen register cases statewide.
People v. Castro — gang enhancement evidence sufficient
Division One published an opinion July 1 affirming felony convictions including active gang participation under Penal Code section 186.22. The court held that evidence of the defendant's tattoos, associations, and conduct supported the gang enhancement finding — a published decision adding to Fourth District precedent on what constitutes sufficient proof of gang membership at trial.
July 1 marked the delayed operative date for roughly two dozen statutes given extra compliance time beyond the January 1 default. Among laws now in force: SB 97 regulating digital financial assets and stablecoins; commercial volume limits; expanded food labeling requirements; and school phone policies — the statutory landscape practitioners navigate as California enters the second half of 2026.
California regulates digital financial assets and stablecoins
Among the June 30 signing batch, Senator Tim Grayson's SB 97 establishes California's framework for digital financial asset businesses and stablecoin issuers — one of the delayed-operative statutes taking effect July 1. The law joins a growing body of state-level crypto regulation as federal oversight remains contested, giving California practitioners new compliance obligations for digital asset operations.
The Legislature enters its summer session with budget trailer bills still moving. Sacramento Superior Court calendars Huntington Beach housing penalties. Supreme Court opinion days resume, and SB 690 advances through Assembly committees.
Supreme Court opinion day
Monday publication cycle — first opinion day after the July 2 batch including Espino and Doe v. Marysville. Watch for grants of review from the weekly conference.
San Diego Superior Court hearing on penalties for the City's continued Housing Element Law noncompliance and pending affordable housing application — following July 2 anti-SLAPP ruling.
Assembly Privacy and Consumer Protection Committee amendments to SB 690 — removing private pen register right of action — advance toward floor vote after July 1 hearing.
California's Delete Act DROP mechanism — allowing consumers to direct all registered data brokers to delete personal information — takes full effect, expanding CPPA enforcement scope.
Fourteen certified ballot measures — including ACA 22 local tax thresholds, SB 417 housing bond, and SCA 1 recall reforms — go before voters. Budget allocated $29 million to accelerate vote counts.