It includes a $5.6 billion surplus and sets aside $750 million to reduce homelessness.
Newsom also spent a considerable amount of time promising funds for education.
A Fresno shout-out though was heard loud and clear in the Valley.
Governor Newsom is a big fan of the Fresno DRIVE Initiative.
DRIVE stands for Developing the Region's Inclusive and Vibrant Economy.
The governor pledged $50 million to the project.
"I have been so impressed with this DRIVE coalition out of Fresno, this public-private partnership of the region's leaders, they have put together a remarkable plan," he said.
"We'll make a down payment on that by putting $33 million to coordinate with UC Merced," he added.
The Central Valley Community Foundation is the backbone of the Fresno DRIVE Initiative.
Chief Operating Officer Elliott Balch said the group is committed to making the valley's economy healthier and more inclusive by reaching out to under-served areas.
"You can see information numbers in there - $33 million for a new research partnership between UC and Fresno State, helping create a whole new economic sector," Balch said.
Governor Newsom also said $17 million would go to a workforce development plan with DRIVE to focus on a K-16 collaborative in Fresno.
"They're under-represented in terms of number of accountants out there and teachers, nurses," he said.
Governor Newsom attended DRIVE's summit in November and came away impressed with the plan local leaders put together.
"He found the DRIVE plan very impressive and I think what's impressive about it is not just the words on the page but the fact that it comes from a couple of hundred organizations with lots of different interests," Balch said.
The governor says his Higher Education Advisory Committee has asked that the Fresno DRIVE Initiative be made a priority.
"If they can prove this works here in Fresno, then we can go to the central coast, inland California and don't forget the North Coast of California," he said.
The governor's budget would also set aside $15 million to expand the UCSF School of Medicine Fresno branch in partnership with UC Merced.