Newsom Highlights Wins, Teases Budget Release in State of State

In the last State of the State address of his administration, Gov. Gavin Newsom hit many of the anticipated talking points while also teasing some of the plans for the much-anticipated budget unveiling tomorrow.

The governor wasted no time attacking partisan criticisms of the Golden State, calling out what he called a “carnival of chaos” within the federal government, adding to the regular trading of political and personal attacks between Newsom and President Donald Trump.

Where technology is concerned, the governor highlighted several broad-scope efforts to bolster high-tech and biotech jobs — namely, career pipeline programs and investments in university research, like the one he announced in October focused on quantum and fusion technology.

The governor called out the state’s leadership in the artificial intelligence policy space, highlighting recent guardrails signed into law. He called out the need to encourage innovations while also discouraging recklessness.

“The bottom line is the tech genie is out of the bottle,” Newsom said. “The question is not whether change is happening; it is. The question is what values will guide us into this new frontier.”

Newsom called on lawmakers to reauthorize the state’s California Competes Tax Credit program, which was designed to offer incentives for job-creating businesses, for another five years as a part of the budget being released tomorrow.

That budget, the governor said, will include a $248.3 billion general fund and an additional $42.3 billion in previously unforecasted revenues. Newsom said there will be $7.3 billion earmarked to rebuild the state’s reserves.

Education will be seeing a substantial bump in investment in the budget, Newsom said, especially related to per-pupil funding — a proposed increase to $27,418 per student — and $1 billion slated to create new “high need” community schools throughout the state. These moves, in conjunction with efforts to reduce class sizes, could be an early indicator of future technology investment on the part of districts.

The governor teased “long overdue reforms” to the education system, specifically giving oversight of the Department of Education — as well as local education agencies — to the State Board of Education.

“I know not everyone will share enthusiasm for these reforms, but I think it's time to modernize the management of our educational system,” he said.

Newsom also reflected on efforts at the regional level to address homelessness, mental health and drug treatment. The passage of Proposition 1 in 2024 created $6.38 billion in funding to address the crisis, and a second phase is slated to put what the governor called a “predictable” $1 billion in funding each year into the hands of regional governments.

“I say this with love and respect to the counties, no more excuses. It’s time to bring people off the streets and out of encampments and into housing and treatment,” Newsom said. “No more excuses.”

The passage of Prop. 1, the funding streams and state mandates for counties could ultimately create new opportunities for vendors working in the health and human services space.