Hours before Gov. Gavin Newsom is expected to present his budget plan on Thursday, his office released new projections of a $16.5-billion state revenue windfall over three years and offered a rosy outlook on California's fiscal position during his final year in office and the year after. Newsom's office provided few details about his plan to reduce spending or other adjustments that he would need to propose in combination with the increase in revenue to eliminate projected deficits from 2026-27 through 2027-28.
Gov. Gavin Newsom's budget proposal includes no money for a fund formed last year to boost the state's local newsrooms, casting doubt on whether a heralded effort to help California journalists will amount to anything and how serious Newsom is about supporting the struggling industry. It's a significant walkback from an August 2024 deal between state leaders and Google in which they agreed to jointly spend $175 million over five years to fund local journalism.
In December, President Donald Trump called Somali people "garbage." Weeks later, a YouTube influencer began surveilling Somali-run child care centers in Minnesota and making unverified claims of fraud. The San Diego Chapter of the United Domestic Workers of America said it's heard of at least seven incidents since Monday of strangers surveilling, harassing, and even stalking Somali child care providers - and the incidents are likely underreported.
The loss of the federal EV tax credits may have been a huge blow to prospective buyers, but California wants to fill that gap for its residents. Governor Gavin Newsom's proposed budget for 2026-2027, which was released on Friday, includes a "light-duty zero-emission vehicle (ZEV) incentive program" that details a one-time infusion of $200 million. According to the budget summary, this incentive program is "a critical part of the Administration's strategy to keep ZEVs affordable and accessible for all."
Gov. Gavin Newsom's office on Friday forecast a "modest shortfall" of $2.9 billion for the upcoming fiscal year, down sharply from previous estimates in a nearly $349 billion budget proposal that relies heavily on continued windfalls from tech and AI stocks. The governor's 2026-27 budget proposal projects $9 billion more in revenue than anticipated, banking on the AI-driven economy to last. It's significantly rosier than the grim outlook by the nonpartisan Legislative Analyst's Office, which in November projected an $18 billion deficit.
But the boom raises questions: Will it continue to be accompanied by a decline in tech and other jobs? Is it a bubble? RELATED: AI regulation battle looms in California despite Trump threats Tax revenue from stock-option withholding paid by some of the state's biggest tech companies made up about 10% of all income tax withholding in 2025, estimated Chas Alamo, the principal fiscal and policy analyst with the LAO.
Carin Lenk Sloane never considered moving abroad before, never imagined she even would. Sloane is one of roughly two million Californians who buy insurance through Covered California, the state's marketplace - and one of many who could see steep price hikes now that Congress has ended the shutdown without striking a deal on health care.
Assembly Speaker Robert Rivas emphasized that the budget protects California by cutting red tape for housing, preserving investments in health care, education, and public safety.
