Governor Newsom on California's Bold, Balanced Budget

We need to do something urgently in this country to address the radical imbalance of fortunes in America. Something is fundamentally broken if we can mint a trillionaire overnight but millions and millions of people go without health care. If a truck driver pays a larger percentage of his income in taxes than a factory owner. I spoke recently about the need for a national billionaires tax, about ending corporate tax loopholes, about making sure working people benefit from the boom in AI technology. we need to democratize our economy if we're going to save our democracy.

Today, uh I want to tell you about what we've done. What we've done here in California on these very issues. And I I want to take a moment to also challenge challenge a myth that simply won't go away. It's been peddled in this country for decades and decades. And it goes something like this.

You have to choose, choose between being fiscally disciplined and doing big things. Pick one, they tell you, but you can't you can't have both. In California, where I'm from, we reject false choices. We have one of the most progressive tax structures in America. And our budget, it's balanced.

Our rainy day reserves are full. And we think big, really big. Over the past eight years, we've built great things for the people of California. Some of the boldest actions of any government in this country that has been taken in a generation. And we did this without breaking the bank.

We did this by design. I just signed just signed my final budget as governor of California. On time, balanced, and structurally sound. Not just this year, but through June of 2028. For the next two years, California will have a zero dollar deficit.

We're leaving the state in good hands for the next governor. Since 2019, the state's economy grew from three trillion dollars to four and a quarter trillion dollars. That's a roughly 40% growth. No other jurisdiction, not one, in the United States came close. In 2025, California attracted nearly 2/3 of all venture capital invested in America and nearly 40% of all venture capital invested worldwide.

California, we dominate. We have no peers. And California thrives because we we've laid the foundation for one of the healthiest economies in the world with intentionality, extraordinary schools, universities that feed into world-class research labs, and unicorn startups, new manufacturing, small businesses supported by California tax credit and boosted by a career pipeline we developed and we've nurtured. And now here's the part again that cynics don't want you to hear. We did all of that again, balancing the budget, but at the same time, we also paid down long-term obligations, some $15 billion in long-term pension debt.

We're carrying nearly 30 billion in total reserves and closer actually to 40 billion counting the surplus account. We could have spent every dollar this year and called it a victory. We didn't. We left a runway for whoever comes next because that's that's what responsible government does. And we did something else big.

In recent days, working with the legislature, we reached an agreement to place a constitutional amendment before the voters to expand California's rainy day fund. We're expanding our reserves at the same time allowing the state more flexibility to pay down those long-term liabilities and protect our state's fiscal stability well into the future. But fiscal discipline isn't just about what you do at budget time. It's also about, well, how government works every day in every department. That's why I launched an initiative here in California called E3, efficiency, effectiveness, excellence.

The premise is quite simple. Government should work better, work faster, and cost less for the people who pay for it. We've been cutting outdated regulations, consolidating duplicative programs, modernizing the technology that Californians use to to interact with their government, saving taxpayers dollars across every department. Washington, they made a spectacle out of efficiency, and slashing programs without thought, firing veterans, gutting agencies that families depend on. Well, we've been doing real work here, methodically, without the chaos, without out the theater.

So, when people ask, "Well, where did the money go?" Let me tell you exactly where it went. We made school meals free for every single child, breakfast and lunch. No forms, no stigma, no shame. The first state in the nation to do it, and we're keeping it. We created universal transitional kindergarten, a fully funded grade for every 4-year-old, saving thousands and thousands of families money each and every year.

We boosted funding for our public schools from about $17,000 to more than $28,000 for each student in every classroom. That's a 60% increase. And this year, we passed the largest special education investment in state's history, $2.4 billion more in a single year. We expanded health care coverage, drove the uninsured rate, get this, down to 5.9%. That's one of the lowest in the United States.

And I want to pause on that for a second. Texas, it's another big state, has, as an example point of contrast, 16.7% of its population without health insurance. 5.9% California, 16.7 in Texas. Texas is the highest in the country. That's not fiscal discipline, that's just, respectfully, cruelty.

California rejects these false choices. We led the nation in community schools, a revolutionary idea that has transformed literally hundreds and hundreds of campuses across California with rigorous academics, tutoring, healthcare services, as well as counseling all on one site, producing measurable academic improvements. We led the nation in afterschool for all and summer school for all programs benefiting more than a million students. Programs other states only talk about and we funded at scale. We've created a 130,000 free and reduced cost childcare slots.

That's the largest expansion of childcare in the nation. Thousands more in the budget I just signed, saving parents thousands of dollars a year. We made the biggest infrastructure investments in modern California history. Let me give you a proof point. 109 billion dollars are at work today.

109 billion dollars. That's part of a 180 billion dollar 10-year plan without precedent in California. Roads, bridges, water, transit. We connected as well the state with the largest broadband investment we've ever made. We all know this.

A kid without an internet connection is locked out of the future, whether she's from Compton or the Central Valley. We built the clean energy future in real time. A record-breaking 2/3, 2/3 of our electrical power now comes from renewable and zero carbon sources. In the last 7 years alone, we've added 32 gigawatts of clean energy capacity. To put that in perspective, that's roughly a third of all the power California's ever built since the 19th century.

A third of the total in just 7 years. Proving that you can power one of the biggest economies in the world, clean the air, and fight climate change at the same time. We're also sending up to 60 billion dollars in utility rebates back to Californians funded by our cap and invest program. Not a tax on family, a fee on polluters distributed back. Money going directly to working families to lower the cost of their electricity bills.

Climate policy and affordability policy, the same policy. We built the largest aerial firefighting fleet in the world. Invested in cutting-edge technologies, equipment, and firefighters to help knock down the next big fire when it starts. We led the largest expansion, bar none, the largest expansion of mental health and drug treatment facilities in the nation, helping families in distress and keeping people off the streets. We've moved to close five prisons, five, while crime rates have plunged to near record lows.

And we've made record-breaking investments in California's colleges and universities. You may not know this, 65% of our UC and CSU graduates now leave debt-free with a world-class education. We've launched CalKids, making every kid in California eligible for a college and career savings account, a head start on the cost of higher education or starting a business. Five and a half million Californians born with a stake in their own future. We built a a service core, larger now than the Peace Corps.

And we've expanded apprenticeship programs for hundreds of thousands, over 600,000 people now training for great paying jobs. We've raised the minimum wage. No state comes close to $20 an hour fast food workers, $25 an hour for health care workers. We expanded paid sick leave, so every Californian has at least five days. We expanded paid family leave and made wage replacement progressive, so that a working mother taking time to care for a newborn or a sick parent doesn't lose her paycheck.

And we put in place the strongest and most comprehensive statewide renter protections in America. We capped rent increases. We made it the law in California that no landlord can evict a tenant who has paid her rent and followed the rules for no reason at all. Just cause. That's what other states call it.

We made it the standard because in this state we believe a roof over your head is not a luxury. It's the foundation for everything else. And we took on the housing crisis where it actually lives, at the supply side. Streamlining reforms, permitting reforms, zoning reform. We made it easier in California to build.

And since 2019, residential construction in California has grown by 59%. We're building more homes faster than we have in a generation. We've also made historic investments to confront homelessness. Across California communities, with the new 2025 counts, unsheltered homelessness fell nearly 10%. It's the biggest drop in more than 15 years in our state.

Even, by the way, as homelessness has risen all across America and at least in more than half of the states. Count those up. Free meals, free pre-K, free child care, record school funding, health care, infrastructure, broadband, clean energy, utility rebates, higher wages, paid leave, renter protections, more homes built, debt-free college, a savings account for every kid. That's government that believes in itself and balanced its budget every step of the way. Because here's the truth.

Balancing a budget and doing big things take the exact same skill. Both demand the long view. Both demand telling people the truth about costs. Both demand the nerve to invest today in something you won't get credit for until tomorrow. We've been told for decades that austerity is discipline.

It's not. Austerity is a a failure of imagination dressed up as a virtue. We choose differently. We choose to be responsible and bold. To honor the dollar and honor the dream, to balance the books and to keep the big dreams.

I'm not telling you all this to brag about California, though I'm proud. I'm telling you this because for 40 years this country we've been told that government can't deliver, that public investments don't work, that progressive ideas never pencil out. Well, California, with all due respect, is proof that all of that's wrong. We did it here and we can do it everywhere. We did the math.

We did the work. We did the big things. And so to every other state across our country, to Washington, D.C., to anyone who's been told that responsibility and ambition that can't share the same balance sheet, come to California. Look at the numbers. Look at kids.

Look at the kids eating breakfast. Look at the work. We can have it all. We're proof.