SACRAMENTO, Calif. (KTXL) — California Democratic leaders in the State Assembly and Senate announced they’ve reached an agreement on the state’s spending plan.

Legislative leaders are sticking with their proposal to send direct payments to taxpayers based on income and family size in response to rising gas prices and inflation.

They also proposed spending billions on relief for small businesses and nonprofits. 

The proposal also includes a record $37.5 billion in reserves after state financial analysts warned of a potential recession as soon as next year.

This budget agreement among lawmakers will still need the approval of Gov. Gavin Newsom, who has proposed a different set of plans to address savings and relief.

The budget is due June 15.