The state faced a 12-billion-dollar budget shortfall this year and withdrew around 13 billion from reserve accounts to balance the budget.
To the naked eye, it looks like that erases the deficit altogether, but it isn't that simple.
Scott Graves with the California Budget and Policy Center says that's because Newsom and lawmakers already agreed to borrow money last year.
Graves said "They made a decision to say we are going to use about $7 billion dollars from our Rainy-Day Fund to help close the budget gap we are projecting for a year from now. So that was sort of already on the books. It was like a handshake agreement between the governor and legislative leaders."
That made the budget roughly balanced, with even a small surplus in January, but a lot has happened since then.
The devastating fires in Los Angeles caused record damage. Swings in the stock market due to federal tariffs also impacted state revenues, so California's deficit grew significantly in the first half of the year.
That meant lawmakers had some tough decisions and had to make some cuts in addition to pulling money from state saving accounts.
Analysts say the budget may be balanced this year, but California's deficit is likely to grow in the years ahead.