Gov. Gavin Newsom will deliver his final State of the State address on Thursday, capping seven years in which he oversaw an aggressive expansion of health care and early childhood education access in California, pushed the state’s progressive climate policies and — in a break from his predecessors — made reducing homelessness and increasing housing supply top state priorities.
In his speech, Newsom is expected to unveil his budget priorities for the year ahead. The address comes as Newsom continues to burnish his national reputation ahead of a possible presidential run in 2028, and as the state faces ongoing fiscal threats from both rising state costs and the Trump administration.
Jason Elliott, a longtime adviser to Newsom who left the administration last year but remains close to the governor, said this year will probably be more about finishing what Newsom started than rolling out new initiatives.
“Gov. Newsom, in order to feel satisfied with the job he did as governor, will want to see universal transitional kindergarten extended to every single eligible kid in California. He will want to see child care slots expanded to the level that he promised and promoted. He will want to see homeless encampment grants and Proposition 1 bond funding for homeless mental health housing be administered quickly,” he said.
“There’s a lot that he talked about over the last eight years that is not quite done that needs to get finished,” Elliott said, “and I would expect that his focus would be very much on completing those multi-year commitments that he made.”
While there are critics aplenty, as Newsom begins his final year in the governor’s office, he has managed to maintain relatively cozy relationships with business and labor leaders as well as other powerful interest groups in Sacramento.
Advocates for education and child care, affordable housing, health care, and the business community all cited major policy accomplishments that they are hoping to protect in the face of growing costs and shrinking revenues.
Leading on early childhood education
Among the governor’s biggest achievements, said longtime early childhood education advocate Scott Moore, was the creation of a new school grade for all 4-year-olds, transitional kindergarten, as well as the expansion of child care and preschool slots for low-income families.
“Unquestionably, he is the early childhood champion governor,” said Moore, who advised both Newsom and former Gov. Arnold Schwarzenegger on state councils and is now CEO of Kidango, a nonprofit preschool organization that serves low-income families in the Bay Area.
The toddler room at Kidango Early Care & Education in San José on Dec. 11, 2024. (Juliana Yamada/KQED)Moore has worked in the field for a quarter-century and said the progress made just in the past few years has been staggering.
“Back then, we had about 50,000 or so children that got public-funded pre-K in the state of California. And now we have over 500,000. That’s a big difference. And most of that growth happened under Governor Newsom,” he said.
Health care expansion limited, holding the line on taxes
Health care advocates also give Newsom high marks for his aggressive expansion of coverage, including to immigrant communities. But they remain disappointed that last year — facing budget constraints and political pressure — Newsom and lawmakers moved to freeze new enrollments of undocumented adults in Medi-Cal, California’s Medicaid program.
Kiran Savage-Sangwan, executive director of the California Pan-Ethnic Health Network, which works to ensure all Californians have access to quality, affordable health care, said Newsom has made universal coverage a priority since day one.
“The first executive order that he signed immediately after being sworn in was to establish the Office of the Surgeon General … That really showed that he understood the connection between the conditions that poor communities are facing and health outcomes,” she said. “He has continued to tackle what we consider the twin issues of the rising and unsustainable cost of health care, and getting to universal health coverage for all Californians.”
Gov. Gavin Newsom announced a successful 2024 mental health ballot initiative at Alvarado Hospital in San Diego on March 19, 2023. (Adriana Heldiz/The San Diego Union-Tribune via AP Pool)Savage-Sangwan also gave Newsom high marks for establishing an Office of HealthCare Affordability in 2022. But as he heads into his final year, she hopes he will reconsider limiting Medi-Cal for undocumented adults — especially as consumers confront President Donald Trump’s deep cuts to both Medicaid and Affordable Care Act subsidies.
“We’re hoping that this is gonna be a moment for the state of California to distinguish ourselves from what is happening at the national and federal levels,” she said. “We think that California has an opportunity to stand in contrast to that rather than bow down and continue that trajectory of taking health care from people.”
She urged Newsom to consider new revenue sources, something that the business community is staunchly opposed to and that Newsom has been generally unwilling to consider.
In fact, CalChamber CEO Jennifer Barrera said taxes are one area where Newsom and the business community have been in lockstep. This year, he has made clear his opposition to a proposed ballot measure being pushed by labor unions that would levy a one-time tax on billionaires.
“He has really drawn the line in the sand on tax policy. He has been the one who has been defending against tax increases for the past several years,” Barrera said.
Barrera also gave Newsom high marks for generally embracing fiscal restraint, for helping broker a huge deal between labor and business in 2024 related to labor protections and litigation, and for generally understanding the importance of the business community to the state’s economic health.
But there have been areas of sharp disagreement, Barrera noted, including around labor protections, environmental laws and oil and gas regulation.
“There’s always going to be those tough calls on some of these labor bills,” she said. “In the environment space, there was some legislation that we certainly would have preferred not be signed and are dealing with now.”
She cited laws limiting oil and gas operations and others requiring large companies to disclose climate emissions as among those challenges. One of the climate disclosure laws is on hold after a lawsuit by business groups.
Mixed reviews on housing, homelessness
Newsom also gets mixed reviews in one of his signature policy areas: housing and homelessness. Republican leaders in the state Legislature note that Newsom failed to deliver on his 2018 campaign promise to build 3.5 million new homes, and say it’s part of a larger pattern.
“Gov. Newsom has made big promises and launched endless new initiatives,” Assembly Republican Leader Heath Flora said in a prebuttal to Newsom’s speech. “But no matter what he says [today] Californians are paying more and getting less, because his policies keep driving up the cost of everyday life.”
California state Assemblymember Heath Flora in Sacramento on May 15, 2017 (Bert Johnson/KQED)But others say Newsom and the Democratic-led Legislature made big strides in increasing housing production and tackling homelessness through policies that will continue to pay dividends after he leaves office. Newsom also used the bully pulpit to bring the issue front and center, said Ray Pearl, executive director of the California Housing Consortium, which advocates for affordable housing.
Pearl noted that Newsom’s 2020 State of the State speech was entirely about housing and homelessness.
“With former governors, when they’d have a State of the State, we would look for anywhere where housing was mentioned,” he said. “I think more than anyone, he helped change the trajectory of the housing issue and made it a mainstream issue.”
Pearl said Newsom pushed unprecedented state investments in affordable housing by significantly increasing tax credits and other resources. He’s hopeful this year that the governor will support a proposed $10 billion affordable housing bond being considered by lawmakers.
As Newsom enters his final year and looks to a potential 2028 presidential run, those close to him know that the state’s shortcomings — and what Newsom did or didn’t do to address them — will be under a microscope.
Elliott, Newsom’s former adviser, said he believes the governor laid the groundwork over his two terms to fundamentally change the state’s trajectory, particularly around housing and homelessness.
“When you’ve got a problem that’s 40-plus years in the making, you don’t see overnight results. That’s frustrating to me. I know it’s frustrating for the governor. I know it’s frustrating to the average Californian,” he said. “What I’m saying is we’ve spent the last seven or eight years in this state putting the pieces in place to materially address all those problems.”
