How will Newsom deal with the projected $18 billion budget deficit?


California Gov. Gavin Newsom gestures with one hand as he speaks from a wooden podium at the state Capitol, with a microphone in front of him and a large dark display mounted behind.
California Gov. Gavin Newsom gestures with one hand as he speaks from a wooden podium at the state Capitol, with a microphone in front of him and a large dark display mounted behind.
Gov. Gavin Newsom speaks during the State of the State address in the Assembly Chamber at the state Capitol in Sacramento on January 8, 2026. Photo by Miguel Gutierrez Jr., CalMatters

Gov. Gavin Newsom will unveil his preliminary state spending plan today — his final budget proposal as governor of California. On his plate: A projected $18 billion budget hole for 2026-27; the loss of some federal funding; and continued economic uncertainty under President Donald Trump.

During his State of the State address Thursday, the governor dropped hints about his budget, including “significant investments in public education,” which includes full funding of the state’s universal kindergarten transition program, an additional $1 billion to expand high-needs schools and more than $27,400 in per-pupil investments. (In 2022–23, the state spends about $20,500 per studentor $2,800 more than the national average of nearly $17,700).

Newsom also plans to overhaul the way California schools are run: The governor’s appointed 11-member State Board of Education will take over the California Department of Education, CalMatters’ Carolyn Jones writes. This would give the governor more influence over the education system. Currently, schools sometimes receive conflicting messages about how students should be taught, and this change could result in children receiving more consistent instruction.

The governor also addressed California’s housing shortage during his speech, claiming investors are “snapping up homes by the hundreds and thousands at a time, crushing the dream of home ownership.”

It’s a feeling Newsom shares with TrumpCalMatters’ Ben Christopher and Jeanne Kuang report. Although details remain scarce for now, the Newsom administration plans to work with the Legislature to limit home ownership by corporate landlords. But some evidence suggests that the issue is overstated: companies that own at least 10 properties own fewer than 3% of all single family homes in California.

More details on how Newsom wants to fund education and housing are likely to be revealed in today’s budget plan, as well as homelessness and mental health services and Medi-Cal. As Jeanne explains, the governor presented an optimistic financial outlook during his state of the statesaying revenue was $42 billion more than expected.

Those gains could help Newsom avoid conflict with Democratic lawmakers over program cuts during budget talks, although progressives have said they will continue to push for new taxes — such as the proposed “billionaire tax” that Newsom opposes — to counter federal cuts.


CalMatters Events: On February 5, CalMatters’ Adriana Heldiz will host a panel to discuss trauma-informed care: how it can shape the future of education, what it takes to sustain it, and how policymakers can support more programs like it across the country. Register here to attend in person in Chula Vista or virtually.



Faculty diversity is still lacking in academia

People wearing black caps and gowns with red, green and white sashes stand in front of chairs during a graduation ceremony among arena attendees.
Graduates at the Fresno State Chicano/Latino Commencement Celebration at the Save Mart Center in Fresno on May 18, 2024. Photo by Larry Valenzuela, CalMatters/CatchLight Local

Although the number of Latino students is growing at a faster rate, the number of Latino faculty who can help as a mentor to these students is still lackingCalMatters’ Angel Corzo and Brittany Oceguera write College Journalism Network.

All but one of California State University’s 22 campuses have at least 25% Latino full-time students. Yet as of fall 2024, only 15% of California instructors are Hispanic. To reach parity with the number of Latino students, the university system would need to hire more than 13,000 Latino faculty.

A spokesman for the state of California cited the low national number of Latinos entering graduate programs as the lack of Latinos in academia. Faculty members also say limited mentoring and poor promotion of programs that help Latinos earn doctorates act as barriers.

As a result, Latino educators—who are often in lower-paid, vacant positions—find themselves taking on more mentoring tasks.

  • Dirk HornLatino professor of political science at Cal State Bakersfield: “There’s a lot of cultural taxation. That’s the biggest problem with the lack of diversity in higher education, diverse faculty take on more work.”

Read more here.

These organizations can help with soil testing after a fire

A man wearing a mask is shown through smoke sitting on a wall with a water hose dousing the flames. Smoke can be seen rising from below where the man sits, with a palm tree in the background.
A man sprays water from a hose on house flames to prevent the Eaton Fire from spreading in Pasadena on January 8, 2025. Photo by Jules Hotz for CalMatters

Modern homes are full of synthetic chemicals and materials that can be found in many items such as electronics, furniture and cookware. When flames engulf homes, the remnants of these chemicals, metals and plastics are released into the air or settle into the soil.

But since the Palisades and Eaton fires a year ago, no federally or state-sponsored soil testing has been conducted, reports Catherine Gammon for CalMatters. Instead, other organizations were forced to intervene.

Los Angeles County Public Health, for example, has committed as much as $3 million to fund free soil lead testing for residents living near wildfire areas. CAP.LA, funded by the R&S Kayne Foundation, connects people with free soil and water testing. The University of Southern California also started a soil testing program known as USC Clean.

Read more in our FAQs to learn how you can test your soil and reduce the risk of soil contamination.

And finally: the asylum seeker released

Two people pose close up outdoors, one standing behind with arms wrapped around the other's shoulders. Both look at the camera with calm expressions, sunlight filtering through the trees in the background, creating a soft, shallow-focus portrait.
Idris Demirtas, a San Diego pedicure driver who fled Turkey, and his wife May Bovenzi, an American citizen. Photo courtesy of Mae Bovenzi

Seven weeks after federal authorities detained a San Diego immigrant from Turkey, a federal judge found the detention unwarranted. Asylum seeker Idris Demirtas was arrested in November during a routine check with immigration officials, and American taxpayers paid about $10,400 for his detention. Read more by Wendy Fry of CalMatters.



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