A 40% jump since he took office

Two days before the fiscal year begins Wednesday, state lawmakers today are poised to approve a budget deal 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.

That means Newsom has seen spending jump by about 40% since he took office eight years ago. adjusted for inflation. That worries fiscal watchdogs.

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 grow. In May, the office said California’s revenue outlook “rests disproportionately on AI-driven equity valuations‘ and that the state is ‘ill-prepared even for a revenue shortfall’, given its spending, depleted reserves and debt.

Translation? Since much of California’s revenue comes from the top 1 percent of earners, a stock market slump could mean huge drops in available state funding for all the increased fiscal promises.

To raise about $5 billion in current revenue, lawmakers approved three tax measures backed by Newsom. These include expanding the tax on health insurers, cap corporate tax credits and imposing a new sales tax on certain software.

The budget also sets aside an additional $6.4 billion for the 2027-28 fiscal year. It’s a move that comes as lawmakers put in place proposed constitutional amendment to voters that would change California’s rainy day fund. The change would allow the state to collect more tax revenue during boom years and dump cash to prepare for fiscal downturns.

The budget adds thousands of new subsidized child care spots, earmarks $900 million for the state’s homeless fund and rejects the governor’s proposed cuts to the Home Support Services program. It also delayed several planned cuts to the program, such as eliminating state-funded dental coverage for Medi-Cal enrollees regardless of immigration status, and clinic cuts.

• Assemblyman Jesse GabrielD-Encino and chairman of the budget committee, in a statement: “Our state budget prioritizes health care, housing and critical programs that working families and our most vulnerable communities rely on.”

Republican legislators broke the spending plan on health care funding for undocumented immigrants and asylum seekers and its potential to shift more costs on privately insured Californians.

The US Department of Education released an internal report that sheds more light on the scope of the Trump administration first round of government cuts since the president took office last January, CalMatters Adam Echelman writes.

By March 31, 2025, the education department has lost about 40 percent 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, remained with one employee. The department also terminated contracts and grants totaling about $2 billion. The report’s authors said their findings were incomplete.

The report found that because of the cuts, the department may not be able to oversee federal education law, including the distribution of financial aid or investigating civil rights violations.

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

• Lampkin: “Those grants are gone.”

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Southern California residents are searching for answers after two recent emergencies threatened nearby communities with dangerous chemicals. But experts say they hold companies accountable for breaking environmental laws is an uphill battleCalMatters’ Alejandra Reyes-Velarde reports.

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

The documents show the two facilities accumulated violations for years and continued to operate. But the legal bar for prosecuting facility operators is high — especially when there is little evidence of intentional fraud, such as falsifying reports or concealing violations, said Ethan Ware, a lawyer who represents companies investigated for environmental crimes.

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

Meanwhile, a bill introduced after the Garden Grove incident aims to strengthening state oversight. It is currently moving through the Assembly’s political committees.

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