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State of the State: 2025 vs 2026
Governor Gavin Newsom -- comparing priorities year over year
Governor Newsom's 2025 and 2026 State of the State addresses share a combative posture toward the federal administration and a celebration of California's economic strength, but the 2026 speech is significantly more specific, data-driven, and results-oriented, pivoting from announcing aspirational programs to claiming measurable outcomes.
From defense to offense on federal battles: In 2025, Newsom cited 41 lawsuits filed against federal actions; by 2026, that number grew to 52 lawsuits, and he added a concrete dollar figure — $168 billion in illegally frozen federal resources that California preserved through litigation. The 2026 speech also escalated its critique of federal policy, specifically targeting the "Big Beautiful Bill" for threatening 1.8 million Californians' health insurance, 2 million with premium increases, and 375,000 with food aid cuts. The 2025 speech focused on immigration enforcement and threats to UCLA; the 2026 speech broadened to fiscal and tax policy critiques, including a detailed comparison of California's progressive tax structure against Texas, Florida, and other states.
A sharp pivot toward measurable results and budget specifics: The 2026 address is anchored by hard budget numbers largely absent from 2025: a $248.3 billion General Fund, revenues $42.3 billion higher than forecasted, a record $27,418 per-pupil spending, $7.3 billion in rebuilt reserves, $11.8 billion in pension paydowns, and an additional $1 billion for community schools. The 2025 speech described programs conceptually — universal TK, school meals, career education — while 2026 claimed results: improved test scores "in every subject area, in every grade level, in every student group," apprenticeship goals exceeded at 600,000 (surpassing the 500,000 target announced in 2025), and unsheltered homelessness down 9% statewide.
New issue areas dominate the 2026 address: Newsom introduced several topics entirely absent from 2025, including a crisis among young men and boys (citing suicide, incarceration, overdose, and social isolation statistics), institutional investors buying up housing, insurance market stabilization, organized retail crime suppression with $267 million in grants and record-low homicide rates, a push to eliminate ultra-processed foods from school cafeterias, the launch of CalRx insulin at $11 per pen, and a proposal to unify the State Board of Education and the Department of Education. He also devoted significant time to infrastructure at scale — citing $109 billion and 28,000 projects — and specific milestones on high-speed rail, Sites Reservoir, and battery storage in Fresno County.
Environmental framing shifted from values to economic competition: In 2025, clean energy was framed around environmental progress and ZEV adoption. In 2026, the framing became explicitly about economic competition with China, noting China manufactures 70% of the world's EVs and sent 800 delegates to COP 30 while the US was "nowhere to be found." Newsom emphasized California ended all coal-fired power and ran on 100% clean energy for part of 9 out of 10 days, but the tone was urgency about losing global market share rather than celebrating environmental milestones.
New Priorities in 2026
- +A focused initiative on the crisis facing young men and boys, including an Executive Order creating the Men's Service Challenge calling on 10,000 young men to serve as tutors, mentors, and coaches.
- +Combating institutional investors and private equity firms buying up homes, with plans to strengthen oversight, enforcement, and potentially change the state tax code.
- +Insurance market stabilization, including requiring insurers to lower rates for home hardening and becoming the first state to do so, with six companies committing to remain or expand in California.
- +Public safety results and organized crime suppression, citing $267 million in grants to police and prosecutors and record-low homicide rates in Oakland (lowest since 1967), LA (since 1966), and San Francisco (since 1954).
- +Eliminating ultra-processed foods from school cafeterias, described as the nation's most expansive plan of its kind.
- +Launching CalRx insulin at $11 per pen as a state-branded generic drug.
- +A proposal to unify education policy-making by merging the State Board of Education and Department of Education under the Superintendent of Public Instruction.
- +A new rebuilding fund to close the gap between insurance payouts and actual reconstruction costs for LA fire survivors.
- +Making universal before- and after-school programs (nine hours daily plus 30 summer days) available at every elementary school in the state.
- +Explicit framing of clean energy competition with China as an economic and geopolitical threat, citing China's dominance in EV manufacturing and global market share.
- +Cell phone restrictions in schools and expanded kids' online safety legislation, with discussion of potentially following Australia's bolder approach.
- +Detailed budget specifics including $248.3 billion General Fund, $42.3 billion revenue surplus, $7.3 billion in reserves, and $11.8 billion in pension paydowns.
Dropped from 2025
- −The DMV modernization effort, highlighted in 2025 as a symbol of government reform, received no mention in 2026.
- −The Engaged California platform for citizen feedback and government participation was not referenced.
- −AI-powered wildfire detection cameras and CAL FIRE satellite technology, specifically cited in 2025, were not mentioned in 2026.
- −The Office of Data and Innovation and its work redesigning government service delivery went unmentioned.
- −CalSavers retirement savings program and support for older and disabled adults were not discussed.
- −The Space Industry Task Force and UCLA Research Park (converting a shuttered LA mall) received no specific mention.
- −The Climate Action Corps as a standalone climate service program was not highlighted, though the broader California Service Corps was mentioned.
- −Zero-emission vehicle sales statistics (2 million sold, 60 ZEV manufacturers) were not cited, replaced by broader clean energy framing.
Shifted Emphasis
- ↔Federal lawsuits grew from 41 to 52, and the framing shifted from defensive resistance to quantified victories, including $168 billion in preserved federal funding.
- ↔The apprenticeship goal shifted from an aspirational target of 500,000 by 2029 to a claimed achievement of 600,000 already surpassed.
- ↔Education moved from describing new programs (universal TK, free meals, career pathways) to claiming measurable results — improved test scores across all demographics and highlighting LAUSD Superintendent Carvalho's leadership by name.
- ↔Housing policy shifted from CEQA reforms and accountability tools to a new focus on combating institutional investors and private equity landlords, plus specific mention of 61 housing reform bills signed.
- ↔CalRx evolved from a pilot program that lowered generic naloxone prices by 25% to a fully launched insulin product at $11 per pen.
- ↔The LA wildfire response shifted from immediate crisis management and debris removal to anniversary reflection, with new specifics ($2.5 billion committed, 2,500+ building permits issued) and a proposed rebuilding fund.
- ↔Clean energy framing pivoted from celebrating California's environmental leadership to warning about economic competition with China and the risk of ceding global markets.
- ↔Community schools investment was updated from a general commitment to a specific $4.1 billion already invested across 2,500 campuses, with an additional $1 billion proposed.
- ↔CalCompetes tax credits shifted from a historical summary ($52 billion attracted since 2013) to specific new examples (steel mill in Kern County, fusion R&D in San Leandro) and a request to reauthorize for five years.
- ↔Homelessness response moved from describing Homekey and program creation to claiming a 9% statewide drop in unsheltered homelessness, plus specific Prop 1 implementation progress (4,236 mental health beds, 18,875 outpatient slots approved).
- ↔Volunteer and service corps programs shifted from broad descriptions of multiple corps to a focus on the Men's Service Challenge and College Corps ($10,000 for 450 hours of service), with the overall corps now described as larger than the Peace Corps.
- ↔The Jobs First regional economic initiative moved from a conceptual description of 13 collaboratives to specific sector strategies by region (aerospace on Central Coast, biotech in San Diego, manufacturing in Central San Joaquin).
- ↔Affordability framing expanded from listing individual programs to a 'stacking' framework, quantifying $18,000 in average family savings and adding energy bills as the new 'cost of eggs,' with $60 billion in Cap-and-Invest rebates highlighted.
Policy Topics Addressed
Affordability
Governor Newsom addressed affordability as a "stacking of many issues" with housing as California's "original sin." He signed 61 housing reform bills, highlighted the $60 billion Cap-and-Invest rebate program for energy bills, and touted record per-student education spending of $27,418. He noted California's progressive tax system taxes the middle class less than 11 other states. He announced plans to combat institutional investors buying homes and highlighted $7.6 billion returned to working families through the tripled Earned Income Tax Credit since 2019.
Agriculture
Governor Newsom highlighted California as having the most productive agricultural economy in America. He referenced regional economic plans including agriculture in the Central San Joaquin and ag-tech on the Central Coast, and noted the state's efforts to eliminate ultra-processed foods from school cafeterias.
Economy & Jobs
Governor Newsom highlighted California as the world's fourth-largest economy at over $4 trillion, with revenues $42.3 billion higher than forecasted. He touted the Jobs First economic blueprint with 13 regional strategies, CalCompetes tax credits, and the Film and Television Tax Credit Program. He noted half of the nation's billion-dollar startups are headquartered in California and that the state is making landmark AI regulations as a template for the nation.
Education
Governor Newsom announced the most significant investments in public education in California history, with a record $27,418 per student backed by a $248.3 billion General Fund. He highlighted fully funding universal TK, nearly one billion school meals served, plans to eliminate ultra-processed foods from cafeterias, and expanding community schools with an additional $1 billion. He also proposed unifying education policy-making under the State Superintendent and celebrated the cell phone ban signed the previous year.
Environment & Energy
Governor Newsom highlighted California's clean energy leadership, noting the state ended all coal-fired power use, ran on 100% clean energy for part of 9 out of 10 days, and that two-thirds of energy comes from clean sources. He celebrated extending the Cap-and-Invest program for 20 more years providing $60 billion in energy bill rebates, enabling a new regional energy market, and working on insurance reform for wildfire resilience. He positioned clean energy as an economic competitiveness issue against China, noting California has seven times as many clean energy jobs as fossil fuel jobs.
Government Reform
Governor Newsom proposed unifying policy-making by the State Board of Education and Department of Education to streamline education governance, and called for reauthorizing the CalCompetes tax credit program for five more years. He highlighted updating environmental review to allow faster permitting for housing and clean energy projects, using the state's new fast-track permitting authority for major infrastructure.
Healthcare
Governor Newsom touted California's 6.4% uninsured rate as one of the lowest in the nation and the state's CalRX program launching insulin at $11 a pen. He warned that the federal 'Big Beautiful Bill' puts 1.8 million Californians at risk of losing health insurance and 2 million facing premium increases. He also cited the largest health care expansion in America and subsidies for 370,000 people through Covered California.
Housing
Governor Newsom called housing "California's original sin" and noted signing 61 housing reform bills in the past year alone, clearing regulatory thickets and modernizing environmental review. He targeted institutional investors buying homes by the thousands, calling it "shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities," and pledged to work with the Legislature to combat monopolistic behavior and potentially change the state tax code. He also proposed updating environmental review processes that haven't changed in 50 years.
Immigration
Governor Newsom strongly condemned federal immigration actions, describing "secret police, businesses raided, windows smashed, citizens detained, masked men snatching people in broad daylight, using American cities as training grounds for the US military." He positioned California as proving that "legal immigration works" and filed 52 lawsuits against federal overreach.
Infrastructure
Governor Newsom highlighted $109 billion in infrastructure projects currently underway — more than 28,000 separate projects employing over 200,000 people — calling it the most since Governor Pat Brown. He cited environmental restoration, energy projects, roads and bridges, water and power, rail and ports, and broadband for rural communities. He emphasized progress on High-Speed Rail with 60 miles of guideway completed in the Central Valley, Sites Reservoir as the first above-ground water storage in 50 years, and full electrification of 51 miles of Caltrain track.
Public Safety
Governor Newsom reported double-digit decreases across crime categories: property crime, aggravated assault, car theft, burglary, robbery, and violent crime are all down. He highlighted record-low homicide rates in Oakland (lowest since 1967), LA (lowest since 1966), and San Francisco (lowest since 1954). He cited $267 million in grants to police departments and prosecutors to combat organized crime and retail theft, the addition of over 1,000 new CHP officers, and Crime Suppression Teams deployed in multiple cities.
Social Services
Governor Newsom highlighted extensive social service investments including a record $27,418 per student in education, nearly one billion school meals served, and support for 487,000 children in child care programs. He noted the state's low 6.4% uninsured rate, the CalRX program launching insulin at $11 a pen, and Homekey/Project Roomkey taking more than 72,000 people off the streets. He reported a 9% drop in unsheltered homelessness in 2025 and announced $1 billion to expand community schools.
Tax & Budget
Governor Newsom announced a General Fund of $248.3 billion with revenues $42.3 billion higher than forecasted, driven by economic growth. He proposed rebuilding reserves by adding $7.3 billion and paying down $11.8 billion in long-term pension obligations. He highlighted record per-student spending of $27,418 and defended California's progressive tax system, noting 11 states tax their middle class more than California does. He also proposed reauthorizing the CalCompetes tax credit program for five years.
Technology
Governor Newsom positioned California as the global leader in AI, robotics, fusion, space, and quantum computing. He highlighted California's landmark AI legislation creating the nation's first rules for responsible, ethical, and safe AI use, noting New York adopted California's approach. He warned about AI's risks to jobs while celebrating clean energy tech achievements, including running the fourth-largest economy on 100% clean energy for part of 9 out of 10 days.