Gavin Newsom will release his latest California state budget today

Former Gov. Jerry Brown left office eight years ago with a big surplus and an ominous message in his latest state budget: “What’s out there is darkness, uncertainty, decline and recession, so ‘Good luck, honey.'”

Today, Gov. Gavin Newsom is scheduled to unveil his final government spending plan, and he’ll do so with a cloudy crystal ball.

For one thing, California’s public finances are on the back of a booming stock market and booming artificial intelligence companies that drive the Bay Area’s economy. These companies are a a gift that keeps on giving to the government budget, especially with an initial public offering just over the horizon for Open AI creator ChatGPT.

On the other hand, the Trump administration’s priorities are at odds with Newsom’s, and the decisions coming from the White House are costing California billions of dollars in revenues that were expected for health care.

Then there’s the Iran war, which threatens to trigger a global recession as the standoff in the Strait of Hormuz continues.

Newsom in January predicted “modest deficit” of $2.9 billion next year, which will grow to a $22 billion deficit in fiscal year 2027-28.

But since then, the picture has turned a little rosier. California Assembly budget guru Jason Sisney noted that income tax collections came in nearly $11 billion above what Newsom expected five months ago.

The Legislative Analyst’s Office also revised its revenue forecast, finding that the state will likely collect about $25 billion more over a three-year budget window than previously projected.

How much will Newsom want to spend and how much will he set aside to mitigate what may come for his successor? Today we will find out. Check back on CalMatters.org for updates. Our Yue Stella Yu will anchor the coating.

Speaking of government spending: California climate regulators are proposing to change the state’s carbon market in ways that could cut revenue in half — leaving no funding for safe drinking water, fire prevention and other programs. Read more by Rachel Becker of CalMatters.

California just finished writing new plastics recycling rules that demand more from manufacturers and less from consumers. They are among the strictest regulations in the country. And while it’s no surprise that plastic manufacturers are opposed to regulations, why are environmental groups threatening to sue them?

As Alejandra Reyes-Velarde of CalMatters explains, plastic producers will be required by 2032 to make all their packaging recyclable or compostable. They will also have to pay $5 billion over a decade for the environmental damage their products have caused to communities.

But the rules also allow certain materials with unique technical challenges, as well as plastics that federal law requires for food safety, to apply for exemptions. It also allows certain polluting waste technologies to be considered recycling as long as the companies have a hazardous waste permit.

Because of those exemptions, two environmental groups — the Natural Resources Defense Council and Californians Against Waste — said they plan to take California to court.

• Nick Lapisdirector of advocacy for Californians Against Waste, in a statement: “These regulations … create permanent emergency hatches that the law never authorized.”

Read more.

The federal report, which aggregates each state’s “point-in-time count” on homelessness, provides a critical snapshot of the number of unhoused people across the country. But there’s one big problem with the latest report, writes Marissa Kendall of CalMatters: The feds haven’t released it.

The US Department of Housing and Urban Development requires cities, counties, and states to count the homeless population each year. Each region must submit its number to HUD by spring. HUD then scrutinizes the data, compiles the totals, and presents a public report to Congress — which usually happens in December.

But five months have passed and HUD hasn’t budged.

• Jesse Rabinowitza spokesperson for the National Homelessness Law Center: “This is, as far as I can tell, the most recent point-in-time count that has ever been released, including the years it was delayed during COVID.”

The report guides how homelessness funding is allocated, shapes policy decisions and provides country-by-country comparisons. Although California has collected its own dataits analysis did not include information, including race, age and mental health status, like the official federal report.

Read more.

San Diego County leaders want to update the county charter to make local government work more efficiently. But not everyone agrees: While one county board member wants to give supervisors longer terms and more say over senior staff, another called the proposal a “hasty power grab.” Read more by Deborah Brennan of CalMatters.