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-Editorial
Governor Gavin Newsom signed California’s 2025 state budget, a $297 billion spending plan crafted in collaboration with Senate President pro Tempore Mike McGuire and Assembly Speaker Robert Rivas. The budget, which lawmakers describe as balanced and fiscally responsible, is designed to preserve core programs, accelerate housing development, and maintain long-term economic stability amid what state leaders describe as growing economic challenges tied to federal policies under President Donald J. Trump.
The spending package includes major investments in housing, education, health care, and public safety, and is supplemented by a series of trailer bills that outline policy priorities through the coming fiscal year.
“This budget agreement proves California won’t just hold the line — we’ll go even further,” Governor Newsom said in a statement, emphasizing the budget’s focus on preserving healthcare services, expanding pre-K, boosting housing production, and reducing taxes for veterans. “It’s balanced, it maintains substantial reserves, and it’s focused on supporting Californians.”
Senate Pro Tem McGuire praised the budget as a timely and responsible agreement in a challenging fiscal environment, noting its provisions to accelerate housing construction and fund wildfire prevention.
“This budget prioritizes record funding for public education, health care access, and housing,” McGuire said. “It also expands the ranks of CalFire, putting hundreds of new firefighters in the field as we brace for another intense wildfire season.
Speaker Rivas emphasized the contrast between the state’s approach and what he characterized as destabilizing federal actions, particularly mass deportations and economic policies.
“Trump is undermining our economy with reckless tariffs and harsh cuts,” Rivas said. “This budget counters that instability by cutting red tape to build more housing and preserving critical investments in health, education, and safety — without raising taxes on families or small businesses.”
The 2025 California state budget includes a range of initiatives aimed at expanding opportunity and strengthening essential services. Key provisions include Universal Transitional Kindergarten and expanded access to free school meal programs, as well as investments in smaller class sizes and enhanced career training. The budget provides tax relief for military retirees, continues funding for In-Home Supportive Services (IHSS) and reproductive health care, and includes measures to lower prescription drug costs while improving transparency in the pharmacy supply chain. It also expands the CalRx program to allow the state to procure brand-name medications and allocates new investments in California’s film and television tax credit program, increasing support to $750 million annually.
According to the California Department of Finance, federal tariffs and immigration enforcement under Trump-era policies have created severe revenue losses. State analysts estimate that tariffs alone could reduce General Fund revenues by $16 billion in the next fiscal year.
A recent study from the Bay Area Council Economic Institute and UC Merced warned that mass deportations could remove $275 billion from the state’s economy, cut $23 billion in annual tax revenue, and destabilize industries like agriculture and construction.
In response to these conditions, Governor Newsom issued a proclamation authorizing the use of state reserves to protect core services and stabilize the economy.
Alongside the main budget bill (AB 102), Governor Gavin Newsom signed a series of trailer bills addressing key policy areas such as human services, public safety, transportation, education, and climate change. Notable legislation includes AB 121, which focuses on education finance; AB 134, which advances public safety initiatives; SB 120, supporting early childhood education; SB 128, which provides funding for transportation infrastructure; SB 132, enacting adjustments to state tax policy; and SB 141, which allocates funds from the cannabis tax to community safety grants and local programs. The enactment of AB 131 or SB 131, expected Monday, will finalize the 2025 budget package.