Gavin Newsom, Governor of California | Official website
Governor Gavin Newsom has signed the 2025 state budget bill, developed in collaboration with Senate President pro Tempore Mike McGuire and Speaker Robert Rivas. The budget aims to address California's challenges while maintaining fiscal health. It includes policies to accelerate housing production and enhance affordability across the state.
The budget is described by Governor Newsom as a balanced plan that maintains reserves and supports Californians by cutting red tape, boosting housing and infrastructure development, preserving healthcare services, funding universal pre-K, and providing tax cuts for veterans.
Senate President pro Tempore Mike McGuire stated: "The State is delivering a responsible on-time budget in a challenging year focused on fiscal restraint and investing in the people and programs that make this State great." He highlighted record funding for education, healthcare access for vulnerable populations, housing initiatives, wildfire safety measures through expanded CalFire ranks, and preparations for economic uncertainty due to federal policies.
Speaker Robert Rivas remarked: "This is an incredibly difficult time for Californians. Trump is undermining our economy with reckless tariffs, harsh cuts, and ICE agents terrorizing our communities." He emphasized that the budget protects California by accelerating housing construction without raising taxes on families or small businesses.
The budget focuses on public education investments such as universal transitional kindergarten, free school meals, smaller class sizes, career training enhancements, tax cuts for military retirees to support their financial security. It also aims to lower prescription drug costs through legislation regulating Pharmacy Benefit Managers and expanding CalRx's authority.
In terms of economic growth support, the budget includes measures to sustain California’s film industry. Additional legislation expected next week will expand the film and TV tax credit program significantly.
California faces fiscal pressures from federal economic policies under former President Donald Trump. A report projects $16 billion in lost revenue due to tariffs. Deportation-related disruptions could cost $275 billion from the state's economy according to a study by Bay Area Council Economic Institute with UC Merced.
To mitigate these challenges while safeguarding core programs and promoting long-term economic strength Governor Newsom has accessed state reserves via proclamation alongside signing several related bills:
- AB 102 - Budget Act of 2025
- AB 118 - Human services
- AB 121 - Education finance
- AB 123 - Higher education
- SB 101 & SB 103 - Budget Acts
Additional bills cover public safety (AB 134), courts (AB 136), developmental services (AB 143), early childhood education (SB 120), climate change (SB 127), transportation (SB 128), taxation (SB 132), cannabis control grants (SB141) among others focusing on various sectors' needs within California’s governance framework ensuring alignment with approved budgets contingent upon further legislative enactments scheduled shortly after this announcement.
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