What Southern California lawmakers think about Gov. Newsom’s proposed budget

California lawmakers wasted no time in offering their opinions about Gov. Gavin Newsom‘s proposed budget for the 2026-27 fiscal year, an overall spending plan of $348.9 billion, which the governor released on Friday, Jan. 9.

The Newsom administration said the proposed budget limits new ongoing spending while continuing to invest in other areas, including universal transitional kindergarten, child care and health care. The budget calls for $23 billion in reserves and reflects a deficit of $2.9 billion.

Newsom, in a statement, said the budget demonstrates “both confidence and caution.”

“California’s economy is strong, revenues are outperforming expectations, and our fiscal position is stable because of years of prudent fiscal management — but we remain disciplined and focused on sustaining progress, not overextending it,” he said.

New state Senate President Pro Tempore Monique Limón, a Santa Barbara Democrat, said that “during these times of uncertainty, we must craft a responsible budget that prioritizes the safety and fiscal stability of California families.”

Republicans, meanwhile, did not hold back punches against the Democratic governor.

“California does not have a revenue problem; it has a wasteful spending problem. Even with increased revenues from the AI (artificial intelligence) sector, it is reckless to rely on volatile growth as a long-term solution,” Sen. Tony Strickland, R-Huntington Beach, said.

And Assemblymember Tom Lackey, R-Palmdale, criticized Newsom for relying on staff to present the budget, rather than the governor himself.

“As families are drowning in higher gas prices, utility bills, grocery costs and housing they simply can’t afford, the governor couldn’t even be bothered to show up and explain his own budget,” Lackey said.

Late last year, the state Legislative Analyst’s Office projected a budget deficit of $18 billion. But the governor’s budget proposal revised that number down to $2.9 billion.

The state’s finance director, Joe Stephenshaw, told reporters that state revenues have come in higher than previously projected. In addition, he said, the LAO’s projection took into account significant risks of a stock market downturn, while his department’s projection noted the risk but did not reflect it in the budget.

Below are highlights of various areas of the budget and what local legislators thought of them.

Education

The governor’s budget calls for a record-high per-pupil funding of $27,418, fully funding transitional kindergarten, a $1 billion expansion for community schools that provides additional services for families and new funding to support school districts still recovering from last January’s Southern California wildfires.

Sen. Steven Choi, R-Irvine, who sits on the Senate Education Committee, said the budget relies heavily on temporary grants and accounting gimmicks and “fails to provide sustainable, predictable funding that our schools and colleges rely on.”

“Students, teachers and families deserve real investment in classrooms, workforce readiness, and affordability,” said Choi, a former Irvine Unified School District trustee. “The governor continues to present one-time fixes and future deferrals, not real solutions to address the state’s structural deficit.”

Wildfire funding

During his State of the State address on Thursday, Newsom announced that he wants to establish a fund for survivors of the Southern California wildfires to help cover the difference between a homeowner’s insurance payout and the remaining amount needed to rebuild their homes.

“This will help get survivors back into their homes much, much faster,” Newsom said.

On Friday, Stephenshaw said no amount has been set for the fund because the governor intends to work with the legislature over the coming months on the details.

Climate change

The budget proposal includes $200 million to create a rebate program to make buying an electric car more affordable.

The money comes from revenues generated by the state’s cap-and-trade program and an air pollution regulation fund. The goal is to backfill federal tax incentives for electric vehicles that were slashed by Trump’s massive tax and spending cut bill.

Sen. Eloise Gómez Reyes, D-Colton, who serves on the Senate Budget Committee, said she was pleased to see funding to ensure California remains a leader in the EV market as well as investments from Proposition 4, a bond measure voters approved in 2024 to fund climate and environmental projects.

“As Chair of the Budget Subcommittee on Resources, Environmental Protection, and Energy, I am especially focused on how this budget addresses environmental health — particularly in overburdened regions like the Inland Empire, where too many families live with the daily impacts of poor air quality, unsafe drinking water, and environmental degradation,” she said.

The Associated Press contributed to this report.