The state legislature approved California's $108 billion spending plan on Sunday, beating the midnight deadline by about six hours.
The budget legislation passed 55-24 in the Assembly and 25-11 in the Senate.
The legislative session was on the last day the legislature had to meet the June 15 deadline required by the state constitution to send a balanced budget to Gov. Jerry Brown.
The governor and legislative leaders from the Democratic party said on Friday that they had come to a budget agreement and it was just up to the legislature to pass it. Under the law, if the legislature fails to meet the deadline their pay will be suspended.
The budget includes plans for a rainy day fund and paying down debt, while also setting aside money for programs that will benefit lower-income Californians, such as preschool for 4-year-olds from disadvantaged families.
Senate President Pro Tem Darrell Steinberg told reporters the budget accomplishes a lot of what he hoped to achieve in his final year at the Capitol.
But there are critics of the budget, including Senate Minority Leader Bob Huff, who made his feelings known on the floor of the Senate just before the vote.
"Every time one of your constituents complains about the higher taxes and houses prices they can't afford, remember that it's because of land-use rules and permit costs that you voted for," Huff said.
Brown has not publicly commented on the budget's passage, but is expected to sign it.
Republican gubernatorial nominee Neel Kashkari says the budget "powerfully demonstrates how out of touch Sacramento is with the rest of California."