Newsom’s last budget: A 40% jump since he took office

Assemblymember Jesse Gabriel speaks during a floor session of the Assembly at the state Capitol in Sacramento on Jan. 22, 2024. Photo by Fred Greaves for CalMatters

Two days before the fiscal year kicks off on Wednesday, state lawmakers today are poised to approve a budget agreement between Democratic legislative leaders and Gov. Gavin Newsom. Democrats say the plan — Newsom’s last as California governor — balances the state’s budget through 2028, and includes $351 billion in spending for 2026-27.

This means that Newsom has overseen spending soar by about 40% since he took office eight years ago, adjusted for inflation. That has fiscal overseers worried.

The nonpartisan Legislative Analyst’s Office has warned lawmakers that California is increasingly vulnerable to the next economic downturn as its commitments to social programs balloon. In May, the office said California’s revenue outlook “rests disproportionately on AI-driven equity valuations” and that the state is “ill-prepared for even a slip up in revenues,” given its spending, diminished reserves and debt.

Translation? Because so much of California’s revenues come from the top 1% of income earners, a dip in the stock market could mean massive drops in available state funding for all its increased fiscal promises.

To raise an estimated $5 billion in ongoing revenue, lawmakers approved three Newsom-backed tax measures. These include extending a tax on healthcare insurers, capping corporate tax credits and levying a new sales tax on certain software.

The budget also sets aside an extra $6.4 billion for the 2027-28 fiscal year. It’s a move that comes as lawmakers are placing a proposed constitutional amendment before voters that would change California’s rainy day fund. The change would enable the state to collect more tax revenue during boom years and squirrel money away to prepare for fiscal downturns.

The budget adds thousands of new subsidized child care slots, sets aside $900 million for the state’s homelessness fund and rejects the governor’s proposed cuts to the In-Home Supportive Services program. It also delays a handful of planned program cuts, such as the elimination of state-funded dental coverage for Medi-Cal enrollees regardless of immigration status, and cuts to clinics.

Assemblymember Jesse Gabriel, an Encino Democrat and chairperson of the budget committee, in a statement: “Our state budget prioritizes healthcare, housing, and critical programs that working families and our most vulnerable communities rely on.”

Republican legislators have slammed the spending plan for its funding of healthcare coverage for undocumented immigrants and asylees, and for its potential to shift more costs onto privately insured Californians.

Get CalMatters text alerts: We can send you our latest investigations, election coverage and more, and you can send us story tips, comments and feedback. Sign up here.

Trump’s deep cuts to education department

A group of students sits around a table arranging orange and pink word cards into sentences during a classroom activity. Only their hands and partial arms are visible as they interact with the cards. — Students in a literacy class at Oakland International High School in Oakland on March 7, 2025. Photo by Florence Middleton for CalMatters

The U.S. Department of Education released an internal report that provides greater clarity on the magnitude of the Trump administration’s first round of government cuts since the president took office last January, writes CalMatters Adam Echelman.

Through March 31, 2025, the education department lost about 40% of its staff, according to the report. The cuts were uneven across the department’s 17 offices: The 14 employees in the Office of Legislative and Congressional Affairs, for example, were untouched, while the Office of English Language Acquisition, which serves immigrant students, was left with one employee. The department also terminated contracts and grants totaling roughly $2 billion. The report authors said their findings are incomplete.

The report finds that because of the cuts, the department may be unable to oversee federal education law, including distributing financial aid or investigating civil rights violations.

Edgar Lampkin, the chief executive of the California Association for Bilingual Education, says the effects have been “devastating.” His association, along with another English learners advocacy organization, has long received federal grants to train California’s bilingual teachers, sometimes totaling as much as $1 million annually.

Lampkin: “Those grants are gone.”

Demanding answers after SoCal emergencies

A firefighter walks through a smoke-filled industrial street as fire engines spray water onto a burning warehouse. Fire hoses snake across the wet pavement, where puddles reflect the firefighter and the hazy morning light. — Firefighters battle a blaze at a cold storage facility in the Boyle Heights neighborhood of Los Angeles on June 22, 2026. Photo by Ted Soqui for CalMatters

Southern California residents are seeking answers after two recent emergencies threatened nearby communities with hazardous chemicals. But experts say holding companies accountable for violating environmental laws is an uphill battle, reports CalMatters’ Alejandra Reyes-Velarde.

Earlier this month, a warehouse fire in Los Angeles’ Boyle Heights risked exposing residents to anhydrous ammonia — a chemical that can lead to death at high concentrations. The incident followed the May evacuation of 50,000 people in Orange County’s Garden Grove, after authorities found that a tank at an aerospace manufacturing facility could explode or leak large amounts of a toxic chemical into the air.

Records show that the two facilities had racked up violations over years and continued operating. But the legal bar to criminally prosecute the facilities’ operators is high — especially when there is little evidence of deliberate deception, such as falsifying reports or hiding violations, said Ethan Ware, an attorney who represents companies investigated for environmental crimes.

Ware: “That’s a hard sell to a jury, to a judge, to anybody.”

Meanwhile, a bill introduced after the Garden Grove incident aims to strengthen state oversight. It is currently moving through Assembly policy committees.

California Voices

We must dispel the notion that Alzheimer’s is an inevitable end-of-life process, but rather a disease that deserves earlier attention, better tools and more proactive care for patients, writes Norm Enriquez, a retired drug industry researcher, executive and clinical professor.