Newsom outlines $248.3 billion budget, education and housing priorities in final State of the State
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Summary
Governor Gavin Newsom told a joint convention in Sacramento that he will submit a $248.3 billion general fund budget with $42.3 billion in additional revenue, promising record per-student spending, new homelessness and housing measures, public-safety grants and a low-cost insulin pen.
Governor Gavin Newsom delivered his final State of the State address to a joint convention in Sacramento on Sept. 12, 2025, and previewed a general fund budget of $248.3 billion that he said includes $42.3 billion more revenue than forecasted. "It will be a general fund budget of $248,300,000,000," Newsom said, adding that higher-than-expected receipts will allow investments in schools, homelessness and infrastructure.
Newsom said the plan would rebuild reserves by $7.3 billion and pay down more than $11.8 billion in long-term pension liabilities, including $3 billion in the coming year. He highlighted education investments, saying the budget will fund a record $27,418 per pupil, fully fund transitional kindergarten for all, expand after-school and summer programs, and add $1 billion to grow community schools. "This budget includes the most significant investments in California's education history," he said.
On homelessness and mental-health services, Newsom cited early data he said show a near-9% drop in unsheltered homelessness statewide in 2025 and pointed to Proposition 1 bond spending and service expansions. He said Prop. 1 (2024) has supported new treatment and housing capacity and that the budget will redirect $1 billion a year in ongoing mental-health funding to local housing and treatment programs.
Housing and affordability were a central theme: Newsom said the administration will press to lower construction costs, modernize building methods, and curtail large-scale institutional purchasers that buy homes in bulk. "It's time to tackle that issue," he said, urging the Legislature to consider changes including tax-code adjustments and stronger enforcement.
Newsom also emphasized public safety investments, citing $267 million in grants to 55 local law-enforcement agencies and an increase of 1,000 California Highway Patrol officers. "We deployed crime suppression teams," he said, listing deployments to Bakersfield, San Francisco, San Bernardino, Oakland and Stockton.
On health care costs, Newsom noted recent steps under the state's CalRx program, including release of a low-cost insulin pen he said was launched "at just $11." He described the move as part of a broader effort to lower prescription costs through a state-run generic-drug program.
The address further detailed infrastructure and climate projects — Newsom cited a $109 billion construction program including Sites Reservoir and battery/solar storage projects and said the state is pursuing fast-track permitting for major projects. He framed many proposals as economic development tied to workforce and innovation strategies.
Newsom closed by asking the Legislature to reauthorize tax credits and invest in job creation programs; the joint convention agreed that his address be printed in the Assembly journal as a special appendix. The Assembly then returned to regular session and adjourned sine die.
