Newsom casts California as ‘foil to the Trump agenda’ in final State of the State

by Jeanne Kuang, CalMatters

Gov. Gavin Newsom promoted California as an antidote to the Trump agenda on Thursday, telling lawmakers during a wide-ranging State of the State address that California still leads in a host of critical areas such as manufacturing, technology, education and agriculture.

“Every year, the declinists, the pundits and critics suffering from California derangement syndrome look at this state and try to tear down our progress,” he said, instead pointing to technological advancements and engineering talent as a metric of his administration’s success.

“California’s success is not by chance — it’s by design. We’ve created the conditions where dreamers and doers and misfits and marvelers with grit and ingenuity get to build and do the impossible.”

He touted a 9% reduction in unsheltered homelessness, cheaper insulin and increased clean energy use in California as among his accomplishments, in a speech delivered with an eye toward higher office.

The address, his first State of the State to lawmakers in the Assembly chambers since 2020, was light on policy details for Newsom’s final year in office. Instead, he used as an opportunity to highlight progress on some of his most ambitious promises on housing affordability, expanded health care coverage, universal pre-kindergarten and going fossil fuel-free. Some of thosehaven’t yet been met.

He targeted the Trump administration on a range of issues, including excessive policing and immigration raids, saying the state “faces an assault on our values unlike anything I have seen in my lifetime.” And in a common talking point for Newsom recently, he indirectly criticized the president for deprioritizing clean energy as China dominates electric vehicle production, and pointed to his own visits to international climate conferences.

“In California, we are not silent. We are not hunkering down. We are not retreating. We are a beacon. This state is providing a different narrative,” he said.

In a closing segment that roused the most support from lawmakers, he renewed his call for Trump to back a requested $34 billion aid package for Los Angeles to recover from last January’s wildfires.

California’s relationship with the president has steadily deteriorated in the past year, between the state’s frequent lawsuits, Trump’s deployment of immigration agents and the National Guard to Los Angeles, federal funding fights andProposition 50, Newsom’s successful redistricting measure to help Democrats gain five new seats in Congress this year. But Newsom attempted a nod toward unity on the issue of fire aid, pointing to the recently deceasedRepublican Rep. Doug LaMalfa’ssupport for it.

“It’s time for the president of the United States to act like a president for all of the United States,” he said, later adding, “we’re home to more Americans than any other state.”

Newsom casts homelessness as a ‘win’

On homelessness, the reduction in the number of Californians sleeping on the street, in vehicles and in other places not meant for habitation is an important figure for the governor as he seeks to show improvement on one of California’s most stubborn challenges in his final year in office.

A humanitarian and public health crisis and the most visible consequence of California’s housing shortage, Newsom is sure to face national criticism on homelessness should he make an expected presidential run in 2028.

Lawmakers were restrained in their responses to Newsom claiming success over the reduction. It comes after years of increases in homelessness despite Newsom’s campaign promises to tackle it andpouring over $24 billion to itduring his two terms. In 2024, the year before the announced reduction, homelessness in California hit a record high: 123,974 were unsheltered while 63,110 were sheltered. That year, homelessness also spiked nationally.

Newsom did not announce the number who were homeless overall in 2025. The federal government in the coming weeks is expected to release the results of the 2025 homeless census for each state, including California. In the meantime, many California counties have already released their individual results. Several, including Contra Costa, San Diego and Los Angeles,indeed are showing progress.

“I think the question always comes back to us, is it enough?” said Senate President Pro TemMonique Limón, a Santa Barbara Democrat, to reporters after the speech.

Newsom touted his administration’s focus on sweeping street encampments and building new mental health facilities paid for with Prop. 1, a $6.3 billion bond he promoted and which voters approved in 2024.

He also spoke about making the state more affordable, an issue over which Democrats and Republicans nationally are jockeying for credit after the 2024 presidential election showed voters were heavily motivated by the high cost of living.

The issue is another weakness for Newsom on the national stage. Republicans criticizing him after the speech mostly accused him of not doing enough to lower costs.

“The results don’t match the rhetoric,” said Sen.Rosilicie Ochoa Bogh, a Yucaipa Republican, in a statement. “While speeches sound optimistic, budgets at the kitchen table don’t add up.”

Newsom plans to seek policies in his final year in office tocrack down on large-scale investorsbuying up houses, forcing would-be homebuyers to compete — a day after Trump also announced a similar effort. It’s a new area for him in housing policy, after years seeking to boost construction. Newsom ran on a promise of building 3.5 million new housing units; the state has fallen far short of that.

Newsom also ran on a promise of a universal public health care system; he has since shifted to expanding access to Medi-Cal, the state health program for low-income residents that faces punishing federal cuts under Trump. On Thursday, he touted the state’s production of $11 insulin as one way his administration has tackled health care costs.

Projecting a rosier budget outlook

The address was also a preview of Newsom’s last budget proposal, to be released Friday.

The state began the year facing anestimated $18 billion deficitand remains threatened by federal cuts. Newsom now says revenues have come in $42 billion higher than expected — a “windfall” officials mostly attribute to stock market gains and theartificial intelligence boom. But he did not reveal where that leaves the deficit, disappointing some lawmakers.

“I didn’t hear anything about the budget deficit, I didn’t hear anything about what we’re going to do to grow our economy,” said AssemblymemberJasmeet Bains, a moderate Democrat from Bakersfield who is also running for Congress in a district with many residents who could lose health coverage under Trump’s tax and spending bill. “What about the health care disparities? … There’s a lot of questions that need to be answered.”

A rosier-than-expected financial picture could allow Newsom to avoid difficult fights with Democratic lawmakers over major cuts to programs, while maintaining funding for banner Newsom administration priorities like expanding public school to include all four-year-olds and providing more funding for community colleges.

Democrats will be sure to jockey for additional funding for their favored programs or to reversescheduled cuts to Medi-Cal coveragefor low-income undocumented immigrant adults they made last year. But Newsom will propose instead to put $7 billion into reserves and $11 billion toward pension obligations.

Democratic lawmakers mostly said they were cautiously optimistic about Newsom’s budget preview, though progressives said they’ll continue to push for new taxes to backfill expected federal health care cuts, such asa proposal to tax the wealthiest Californiansto generate more revenue, which Newsom vocally opposes. The governor instead will propose to renew a business development tax credit that has been often used by the technology and manufacturing sectors.

Jeanne Kuang is an accountability reporter with CalMatters who covers labor, politics and California’s state government. CalMatters’ Marisa Kendall contributed to this report. Folsom Times is an authorized CalMatters media distribution partner in an effort to keep our local community up to date on happenings in the State Capitol.