By Joe W. Bowers Jr., California Black Media  

On Jan 10, Gov. Gavin Newsom will present his 2026 budget to the Legislature.

On Jan. 6, he previewed budget highlights while receiving the North San Joaquin Valley’s regional economic plan, a part of California’s broader Jobs First Economic Blueprint aimed at driving local and statewide development.

The proposed $322.2 billion budget, including $228.9 billion in general fund spending, addresses a $2 billion deficit that Newsom is required to balance under state law. The Legislative Analyst’s Office (LAO) notes that while $16.5 billion in additional revenue from a strong economy, stock market gains, and higher tax receipts provide flexibility, long-term structural challenges persist. Spending growth, projected at 5.8% annually, continues to outpace revenue growth of 4%, with deficits potentially reaching $30 billion by 2028-29 without adjustments.

Newsom plans to save $1.2 billion over two years by eliminating 6,500 state jobs and cutting $3.5 billion through operational efficiencies like reduced travel and IT modernizations. Despite these measures, Newsom assured there will be no cuts to core programs. Temporary revenue boosts, including $7 billion from stock market-linked income taxes, offer short-term relief but are not sustainable, making California’s $17 billion rainy-day fund a critical tool for managing future fiscal pressures.

This budget will incorporate strategies discussed during a recent special legislative session convened to prepare for potential conflicts with the incoming Trump administration and to safeguard critical state programs against federal interference or defunding.

During the Dec. 2 special legislative session, lawmakers introduced SBX-1, authored by Sen. Scott Wiener (D-San Francisco), which allocates $25 million to the California Department of Justice to cover litigation costs for defending state policies against federal challenges.

The budget continues investments in education, healthcare, housing, and economic growth.

In the 2025-26 budget, Proposition 98 funding for K-12 schools and community colleges increases by $1.5 billion, reaching $116.8 billion, with per-pupil spending rising to a record $23,723. Of this amount, $2.8 billion will be available for new commitments, reflecting forecasts for growth and a 2.46% statutory cost-of-living adjustment. Initiatives such as Universal Transitional Kindergarten, expanded after-school and summer programs, and Universal School Meals are expected to strengthen educational outcomes.

Despite this funding boost, inequities persist in educational outcomes for Black students. Discretionary funds could support programs aimed at addressing these disparities, including investments in teacher training, mental health services, and restorative justice initiatives.

California’s higher education system is expected to benefit from increased funding to support affordability and access across its community colleges, California State University, and University of California systems. The budget will likely emphasize financial aid expansion, enrollment growth for underserved groups, and infrastructure improvements, while aligning educational programs with workforce needs to ensure graduates are prepared to fill existing gaps in the job market.

California’s housing crisis continues to disproportionately affect Black residents. Although Black Californians make up nearly 6% of the state’s population, they represent roughly 50% of its unsheltered homeless population. As of 2024, California’s homeless population exceeded 180,000, reflecting a 31% increase since 2007​​.

The California Legislative Black Caucus (CLBC) is anticipated to play an active role in budget negotiations. Historically, the caucus has championed policies that address disparities in education, housing, and healthcare impacting Black Californians.

The active involvement of stakeholders, including the CLBC, will be pivotal in shaping the state’s response to critical issues impacting Black Californians.

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