SACRAMENTO, Calif. — Gov. Gavin Newsom signed California's budget on Saturday to close an estimated $46.8 billion budget deficit through $16 billion in spending cuts and temporary tax increases on some businesses.

Lawmakers passed the budget on Wednesday following an agreement between Newsom and lawmakers. Both sides made concessions but also scored victories, as they were forced for the second year in a row to roll back or delay some progressive measures made possible by record-breaking surpluses during the Covid-19 pandemic.

“This is a responsible budget that prepares us for the future while investing in essential programs that benefit millions of Californians every day,” Newsom said in a statement. “Thanks to careful budget management over the past few years, we are positioned to meet this moment while protecting our progress on housing, homelessness, education, health care and other priorities that matter deeply to Californians.”

The deficit was about $32 billion in 2023 before getting even bigger this year. More deficits are forecast for the future in the nation's most populous state. Saturday's signing came just two years after Newsom and Democratic lawmakers boasted of surpluses totaling more than $100 billion. Those surpluses are the result of hundreds of billions of dollars in federal Covid-19 aid and a progressive tax code that provided windfall revenue to the state's wealthiest residents.

But those revenue spikes didn't last as inflation dragged down the economy, contributing to rising unemployment and a slowdown in the technology industry, which drove much of the state's growth. The Newsom administration then completely miscalculated how much money California would have on hand last year after the tax filing deadline was delayed by seven months.

California has historically been prone to large budget swings because of its dependence on its wealthiest taxpayers. But these deficits come at an inopportune time for Newsom, who is building his national profile ahead of a possible future presidential run and is being considered as a top surrogate for President Joe Biden's campaign.

The budget includes an agreement that Newsom and lawmakers will seek to amend the state constitution to allow California to set aside more money for future deficits.

However, Republicans said they were left out of the negotiations. They criticized the corporate tax increases, which apply to companies with sales of at least one million dollars and are to remain in place for three years. They would bring the state more than five billion dollars extra next year. And they criticized the Democrats for some cuts to social security programs.