Governor Newsom delivers final State of the State Address, honoring California’s past and reaffirming a brighter future for all

SACRAMENTO - Today, Governor Gavin Newsom delivered his final State of the State address before a joint session of the state legislature. In his remarks, he reaffirmed California's role as a national beacon for democracy, and an economic engine with conscience - pushing back against federal overreach while boldly investing in jobs, education, affordability, climate action, and recovery from the Los Angeles wildfires.

Drawing on a lifetime shaped by California's rivers and communities, Governor Gavin Newsom spoke to the enduring spirit of a state defined by innovation and resilience.

Governor Gavin Newsom State of the State Address

Remarks as Prepared

January 8, 2026

I have spent my entire life - nearly six decades - along the rivers of this remarkable state, from my youthful days on the upper American River with my dad, to my time with my own children, downriver not too far from here.

These rivers shaped the story of California - a sense of place - from the Native peoples shaped by these rivers to the men who extracted riches from the silt. When the shout of "Eureka! Eureka!" began, madness ensued, fortunes were made and lost, many times over. Farmers worked the soil, nourished by those rivers. Settlements turned into towns, towns turned into thriving American port cities. Industry flourished. Through two world wars, a Great Depression, and social upheaval, booms and busts, California endured. Thrived.

And the rivers kept flowing.

For 175 years, California has been a marvel of invention and reinvention, disaster and recovery, grit and ingenuity. We have found a way to build the future, over and over. But today, that California spirit is being tested. We face an assault on our values unlike anything I have seen in my lifetime.

The federal government is unrecognizable, protecting the powerful, at the expense of the vulnerable. Their credo is fear - fear of the future, fear of the stranger, fear of change.

In Washington, the President believes that might makes right, that the courts are simply speed bumps, not stop signs - that democracy is a nuisance to be circumvented. Secret police, businesses raided, windows smashed, citizens detained, masked men snatching people in broad daylight, using American cities as training grounds for the US military - purposeful chaos emanating from the White House.

Shifting the tax burden from the wealthy - from billionaires to small businesses, farmers, the middle class. Lining the pockets of the rich; crony capitalism at an unimaginable scale. State capitalism. Self-dealing. Profit-making, not policy-making. Rolling back rights - attacking marginalized communities, rewriting history, censoring historical facts. Theirs is a politics of twisted nostalgia about restoring the dynamics of a bygone era.

This is not normal.

It's important to remember at moments like these, the greatest tragedy is not, as King said, the clamor of bad people, but the appalling silence of good people.

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. An operational model, a policy blueprint for others to follow.

This state, this people, this experiment in democracy, belongs not to the past, but to the future. Expanding civil rights for all, opening doors for more people to pursue their dreams. A dream that's not exclusive, not to any one race, not to any one religion, or class. Standing up for traditional virtues - compassion, courage, and commitment to something larger than our own self-interest - and asserting that no one, particularly the President of the United States, stands above the law. We've gone to court to protect our people, pushing back against executive overreach - 52 lawsuits filed, all funded by you, by the special session that you led.

And as a consequence, California has preserved $168 billion in illegally frozen federal resources that belong to our schools, our hospitals, our elders; resources that belong to the people of this state. We won requests for emergency relief and affirmed the Constitution as the supreme law of the land.

Mr. President: You cannot cut off critical food assistance for millions. You cannot send the military into American cities without justification. You cannot cruelly and illegally cut off funding for medical research, homeland security, or disaster response.

But, if we are going to keep faith with the California spirit, we must do more than just resist what is wrong. We must keep building what is right. We are not defined by what we're against; we're defined by what we're for. Opportunity, dignity, responsibility. The future.

Every year, the declinists, the pundits, and critics suffering from California Derangement Syndrome look at this state and try to tear down our progress. But we know the truth: California's success is not by chance - it's by design.

We created the conditions where the dreamers and the doers, the misfits and the marvels, with grit and ingenuity, come to build the impossible. We became the destination for the world's first-round draft choices. The best and the brightest, who come from all over for riches and new beginnings.

It's not just the tech founders in Silicon Valley or the producers and writers in Hollywood. I'm talking about the mechanics in Modesto, farmworkers in Salinas, and the police officers in El Centro. No state in America contributes more - none - to American greatness. No state builds more ladders to success or sees around more corners.

The biggest manufacturing economy: constructed here. The most productive agricultural economy: grown here. Eighteen percent of the world's R&D: invested here. Half of our nation's unicorns - $1 billion startups: headquartered here. The happiest cities in America: right here. Fremont, San Jose, Irvine, San Francisco, and San Diego. And by the way, those cities have something else in common: proximity to the finest research institutions in the world, the greatest system of public higher education anywhere. A conveyor belt for talent.

A proof point: just last year, UC added five new Nobel Laureates to its roster. One out of every three laureates in America, right here in California. 13,700 active patents at the UC System, more than any other system in the world. We simply have no peers.

This is the California we've created and nurtured through steps big and small, emanating from this very chamber. You've kept our state stable and reliable by investing in the California Dream.

Just last year, we unveiled the state's first concrete economic development blueprint. Not top-down, but bottom-up, region by region, over 10,000 people participated in the development of this plan. We call it Jobs First.

Thirteen economic and workforce development strategies, aligned with universities and trade schools. A plan that reconciles the macroeconomic story of the world's fourth-largest economy, $4-plus trillion, and the microeconomic reality of 40 million people living here. An economic plan that is nourishing and family-supporting.

For the Central San Joaquin, that means jobs in manufacturing and clean energy, and of course, agriculture. For the Redwood region, jobs in tourism, health, forestry, and fisheries. For San Diego and Imperial counties, new jobs in high tech, biotechnology, advanced manufacturing, and hospitality. And for the Central Coast, new jobs in aerospace and defense, semiconductors, quantum, and ag-tech.

We're doing all of this in conjunction with our wildly successful CalCompetes tax credits. Helping businesses hire more Californians, expanding innovation in this state: aerospace engineering in Torrance; hydrogen fuel manufacturing in Lancaster; fusion R&D in San Leandro; and in Mojave, in Kern County, the first steel mill built in California in 50 years. Building on the success of these regional efforts, in tomorrow's budget, I'll be asking all of you to reauthorize our tax credit program for another five years.

And speaking of tax credits, ever since the first moving image was taken of a horse named Sallie in Palo Alto to the early silent film studios in Fremont and Los Angeles, Hollywood has been the most "California" of industries. That's why we have doubled down on funding California's Film and Television Tax Credit Program, to not only keep our iconic industry here, but all the unionized camera operators, stunt performers, wardrobe, and set designers.

As we support our proud past, we're also making investments in our economic future. We are defining the next decade and beyond - through robotics, fusion, space, quantum, and artificial intelligence.

Speaking of which, it goes without saying that no technology holds more promise and more peril, to jobs, to our economy, to our way of life than artificial intelligence. The tech genie, it's out of the bottle. So the question is not whether change is happening; it is. The question is: What values will guide us into this new frontier?

And that's a question we're answering. Last year, we worked together on landmark legislation to create the nation's first rules for responsible, ethical, and safe use of AI, regulations that provide guardrails that balance risk and opportunity. A consensus effort and a template for the nation, where just recently, New York State adopted our approach and made it their own.

It's an example of California's leadership - of how we're shaping the future. A unique combination of conscience and capital, an entrepreneurial and innovative spirit that encourages risk-taking, not recklessness. Policy that creates predictability, so investors have confidence, and innovators have space to dream, and to do.

Compare this to the carnival of chaos on the national stage. The administration's mini-dramas and vapid day trading, all with real-world consequences, none more striking than the Big Beautiful Bill. That bill is putting 1.8 million Californians at risk of losing their health insurance, and 2 million facing premium increases. Cuts to food aid - poised to impact 375,000 Californians.

And for what? All to benefit the top 10% of this country - people who already own two-thirds of the household wealth. Plutarch was right when he warned us 2,000 years ago that this imbalance of the rich and the poor "is the oldest and most fatal ailment of all republics."

Understanding the lessons of the past, in California, we proudly built one of the most progressive tax systems in the nation. One that asks the highest-income residents to pay a little bit more, without punishing people who are making a little bit less. Think about this: 11 states tax their middle class more than California does, and 16 states tax their low-wage earners more than California taxes its high-wage earners.

So the question is, who are the high-tax states?

Take Texas and Florida. With the most regressive taxes in the nation hammering low-income earners more than the rich. In California, we stand for fairness - and in more ways than one. That's why I was proud to work with the Legislature to raise the minimum wage for fast-food workers to $20, and health care workers to $25 an hour.

Compare that to workers in Alabama, South Carolina, or Tennessee, and in 17 other states, working full-time at just $7.25 an hour, a minimum wage that hasn't been raised in nearly two decades. Try to pay the rent, raise a family, and pay for an education on that.

It comes down to a simple question: Who do you stand for? The rich and the powerful, the most well-connected? Or the bus driver, the janitor, the special education teacher, working overtime to support their families?

And speaking of supporting our educators, I'm proud to submit a budget tomorrow with the most significant investments in public education in California's history, backed by the state's General Fund of $248.3 billion, including revenues that are $42.3 billion higher than forecasted last year.

Why? Because our economy is growing. Because our population is growing. Because of the energy and daring of entrepreneurs, who are dominating the industries of the future.

As a result of this windfall, mindful of the erratic nature of our state revenue and our long-term structural challenges, we're rebuilding our reserves, adding $7.3 billion. And paying down long-term pension obligations to the tune of $11.8 billion, over the next few years, including $3 billion alone in next year's budget.

And speaking of obligations, we all know, there is no greater obligation than to our kids, and their education. That's why tomorrow's budget includes a record-breaking $27,418 per student. This budget will fully fund our universal TK program - and maintains our commitment to reduce class sizes to improve the quality of education for our youngest learners.

It's also a budget that continues our nation-leading investments in school meals, nearly one billion breakfasts, lunches and snacks last year alone, and advances the nation's most expansive and audacious plan to eliminate ultra-processed foods from our cafeterias. Contrast that with what Donald Trump just announced this week, that he will illegally cut all federal funding for TANF and child care, in curiously, just five blue states, including California. Cuts that have the potential of throwing parents into disarray, forcing them to choose between going to work or taking care of their children. Putting at risk the most significant expansion of child care in America - our state already supporting 487,000 children, saving families thousands of dollars a year.

When we talk about saving families money, let's consider the bold commitment that we made just a few years ago to bolster before and after-school programs, providing nine hours a day of enrichment, and 30 days of summer school each year. I'm proud to say that this budget will finish the job and make that pledge universal, at every elementary school in the state. More hours of enrichment, more literacy coaches, more reading specialists, healthy meals for all, and an entire new grade for everyone.

It's not any one of these initiatives on their own; it's also the complete transformation of our campuses through rigorous, relevant, and engaging community schools, one of our most significant achievements. To date, California has invested $4.1 billion in these life-changing, enriching community schools to support nearly 2,500 campuses. And, we're not done. The budget I am proposing includes an additional $1 billion to expand to thousands of additional high-need schools.

These multi-year investments in education, they are paying off. Just this year, we've seen improved academic achievement in every subject area, in every grade level, in every student group. With greater gains in test scores for Black and Latino kids.

These gains are particularly pronounced in Los Angeles, the nation's second-largest school district. To the teachers, classified employees, and the parents of LAUSD: you should be proud of the progress you're making, and particularly proud of the leadership of Superintendent Alberto Carvalho, who is here today. Under his stewardship, the district is outpacing statewide progress, exceeding pre-pandemic levels in every category, and reaching the highest levels recorded since the current state assessments were launched a decade ago. And yes, the Superintendent would be the first to acknowledge, we have a lot more work to do.

Speaking of which, it's long overdue that we modernize the management of our educational system - and so in the budget I'll be submitting tomorrow, I'm proposing that we unify the policy-making by the State Board of Education and the Department of Education, allowing the State Superintendent of Public Instruction to align our education policies from early childhood through college.

We did the right thing last year, when we got cell phones out of our public schools. Every parent understands this. Our kids are increasingly more anxious, addicted, less free, and less happy because so much of their lives is lived online. So much of their life has become performative, measured by external validation - likes and followers. We're watching the spiritual health of our young people erode in real time.

This vital conversation of what to do about it has played out in these chambers for well over a decade. I'm proud that California leads the nation in kids' online safety, thanks to laws you've passed, including many I signed just last year, on age verification, on chatbot safety, on parental controls.

But recently, Australia generated a lot of headlines for taking even bolder steps. The question is, what more should we do? The consequences of getting this wrong are all too apparent: depression; social isolation; and in some cases, radicalization, particularly with our young men and boys, online and offline.

Consider this, and forgive me. You walk into a morgue - of every five young people dead by suicide, four are boys or young men.

Young men: 14 times more likely to be incarcerated, three times as likely to die from a drug overdose, and more than twice as likely to be homeless. One out of seven men has no friends. And half of young men have not even asked a woman out on a date in person. Our young men and boys are struggling - and California is responding.

We recently issued an Executive Order that, among many concrete actions, created the Men's Service Challenge, calling on 10,000 young men to step up as tutors, mentors, coaches, and leaders in their communities. That service extends not just to our men and boys, but also to everyone through the California Service Corps, now larger than the Peace Corps. And through our College Corps program alone, 3,500 students earn up to $10,000 in return for completing 450 hours of service.

"Service is the heart and soul that binds us together," helping build personal character, friendships, as well as careers.

Speaking of careers, I want to thank this legislature for helping fund our state's first master plan for career education. This three-year process, just recently completed, creates seamless, debt-free pathways from school to high-paying jobs, with or without college experience. We're integrating career training, strengthening regional partnerships, and building a new digital "career passport" so people can track their skills.

We set a goal together: producing 500,000 apprenticeships by 2029. I'm proud to announce today that we've surpassed that goal, adding 600,000 earn-and-learn opportunities, more than anywhere else in the country. And many of those apprentices - in skilled trades, electricians, laborers, carpenters - are already at work strengthening and building the physical foundations of our state.

Right now, we're building more infrastructure projects than at any time since Governor Pat Brown - $109 billion currently underway, more than 28,000 separate projects, over 200,000 people working to strengthen this state. Environmental restoration and energy projects, roads and bridges, water and power, rail and ports, broadband for rural communities. Sites Reservoir, the first above-ground water storage in 50 years, as well as the world's largest battery solar storage project - 2,300 megawatts in Fresno County - all moving forward under California's new fast-track permitting authority.

Speaking of tracks, we're finally laying the tracks of the nation's first High-Speed Rail system, building the transportation network of the 21st century. Full environmental clearance. We've built 50 major structures. More than 60 miles of guideway have been completed, ready for immediate track-laying in the Central Valley. 2,270 parcels for right-of-way, procured. Full electrification of 51 miles of track for Caltrain, allowing us to move more people, more efficiently. Connecting some of the fastest-growing places in our state - Fresno, Madera, and Bakersfield - making commute times shorter and making life more affordable for people in the Central Valley.

Affordability - that's not a word we just discovered, and it's certainly not a hoax. Here's the way we think about it. It's not just one issue; it's a stacking of many issues, one on top of another. But the one issue that impacts more things, in more ways, on more days, is the cost of housing, California's original sin. For decades, the story of California housing reforms was one of delay and denial.

That said, we got to work in 2019, passing the strongest statewide renter protections in America. And the past few years, we have enshrined the most consequential housing reforms in our state's history. Just last year alone, I was proud to sign 61 housing reform bills, clearing regulatory thickets, forcing local governments - often resistant - to get in the game, and modernizing environmental review.

But we have more work to do. And I look forward to working with the Legislature this year, particularly to reduce the cost of construction, utilizing new building methods and technology - worker-centered reforms that bring our brothers and sisters in labor along with us.

And there is another urgent area requiring our attention. That's institutional investors snatching up homes by the hundreds and thousands at a time, crushing the dream of home ownership, and forcing rents too damn high for everyone else. It's shameful that we allow private equity firms in Manhattan to become the biggest landlords in many of our cities.

Over the next few weeks, we will work with the Legislature to combat this monopolistic behavior, strengthen accountability, and level the playing field for working families. That means more oversight and enforcement, and potentially changing the state tax code to make this work.

But housing is just one component of the stack of affordability challenges facing California families.

And that's why our stack of solutions has included more than tripling the Earned Income Tax Credit, delivering $7.6 billion back into the pockets of working families since 2019. Together, we created the Young Child Tax Credit and the Foster Youth Tax Credit. We have increased Paid Sick Leave and Paid Family Leave, allowing eligible workers to receive up to 90% of their wages while raising and supporting their families. Through all these targeted tax credits, rebates, and program expansions, the average California family now saves $18,000.

But I recognize that the new "cost of eggs" is now your energy bill.

The number one driver of increased energy bills over the last decade has been the cost of hardening our infrastructure and other related wildfire costs, significantly driven by climate change. That's why I was proud to work with all of you last year to extend our nation-leading Cap-and-Invest program for another two decades, providing close to $60 billion in rebates on your monthly energy bill. This year, we also worked across our differences to enable a new regional energy market that will increase reliability and lower energy bills.

By the way, one of the things that is not high in California is our uninsured rate - 6.4%, one of the lowest in the nation. In addition to the largest health care expansion in America, we subsidized some 370,000 people to help bring down the cost of their health insurance through Covered California.

But it's not good enough to just subsidize health care costs; we need to lower them. And we are doing just that through our CalRX program, launching our own generic drug label. Just last week, we launched insulin at $11 a pen, just as we did with life-saving naloxone last year.

In that same spirit, we also fundamentally overhauled our state's mental health system and homelessness response. When I began as Governor, there was no homeless plan, no mental health plan, and certainly no housing plan. There was no accountability and little investment. The responsibility fell to cities and counties, with little interest from Sacramento.

But that changed when we crafted new statewide programs. Homekey and Project Roomkey - which together has taken more than 72,000 people off the streets, converting hotels, motels, and other properties into longer-term housing. And, we are seeing results.

Early data, just compiled, shows that the number of unsheltered homeless people in California dropped 9% in 2025. We have not seen a drop like this in a decade and a half in California. Los Angeles, down 10.3%; Riverside, down 19%; Contra Costa County, down 34.8%. And I'll remind you that last year, the nation saw an 18.1% overall increase in homelessness. Our investments are paying off.

And of course, it's not good enough, particularly for those living on the streets, self-medicating with drugs or alcohol, suffering from bipolar disorder, schizophrenia, or paranoia. But today, because of your leadership, we have new tools to address these issues. We modernized California's landmark conservatorship laws for the first time in more than 50 years. We created CARE Court, a new legal framework to connect people with untreated psychosis to court-ordered services and housing.

And the California voters spoke, with the passage of Prop 1 in 2024, a $6.38 billion bond to build more mental health housing. In just 18 months, we have already approved nearly 70% of the new treatment beds and slots we promised under Prop 1 - the fastest distribution of bond money in our state's history. 4,236 new locked and unlocked mental health beds, and 18,875 new outpatient treatment slots.

And on July 1 of this year, we will implement the second phase of Proposition 1 by redirecting over $1 billion in annual mental health funding to housing and treatment for people living on the streets, providing counties what they've been asking for: the predictable funding for housing and substance abuse treatment. No more excuses - it's time to bring people off the streets, out of encampments, into housing, into treatment. Counties need to do their job!

That doesn't mean our hands are clean. And that's why, since 2021, the state has removed more than 19,000 encampments and worked with providers to help more than 61,000 people get services. We're seeing results, making streets safer for everyone, and fully recognizing that quality of life is at the core of people's frustrations in this state.

When it comes to quality of life and public safety specifically, let's talk facts. We provided $267 million in grants to police departments and prosecutors to combat organized crime, retail theft, and hold criminals accountable. We deployed Crime Suppression Teams in Bakersfield, San Francisco, San Bernardino, Oakland, and recently, Stockton, supporting local law enforcement with the help of the CHP - a force bolstered by the addition of over 1,000 new officers. Through these efforts, we've seen double-digit decreases in crime overall: property crime, down; aggravated assault, down; car theft, down; burglary, down; robbery, down; violent crime, down. California cities are seeing record-low homicide rates: Oakland, the lowest since 1967; LA, the lowest since 1966; and San Francisco, the lowest since 1954. Again, we have more work to do.

To those with California Derangement Syndrome, it's time to update your talking points. California remains the most blessed and often the most cursed place on Earth: profound natural beauty and prosperity; profound natural disasters, testing our spirits and resources.

I was recently down in Belém, Brazil, at the COP 30 climate conference. The US was nowhere to be found. The United States, a footnote. China sent close to 800 delegates.

Today, China manufactures 70% of the world's electric vehicles, flooding the global market with high-quality, inexpensive cars. This is not about green power; it's about economic power. They are dominating this space. They're locking in markets, locking in supply chains, locking in their influence across the globe. They're cleaning our clock.

But in California, we refuse to be bystanders. Already, we have seven times as many clean energy jobs as fossil fuel jobs. Last year, we ran the fourth-largest economy in the world, using 100% clean energy for at least part of 9 out of every 10 days. Today, two-thirds of our energy comes from clean sources, such as solar, hydro, wind, geothermal, and nuclear power. And just last year, California finally ended its use of any coal-fired power.

We are in the "how" business.

And we also understand how climate risk is financial risk, and that climate risk is becoming uninsurable. That's why we're making our homes and communities more resilient to heat and fire, and working with our Insurance Commissioner, we're stabilizing and protecting homeowners from unpredictable rate increases and cancellations. We became the first state in the country to require insurers to lower insurance for home hardening upgrades. In the last few months, six insurance companies announced their commitment to remain in, or expand their coverage, here in California.

We have a lot more work to do to fully implement our sustainable insurance strategy and for holding insurance companies accountable for meeting their obligation to insure in high-risk areas of our state.

Those insurance stories were front and center when I met yesterday with survivors of the LA wildfires. Let me remind everybody what occurred one year ago. Between January 7 and January 22, 48,000 acres burned, the size of three Manhattans. Communities torn asunder: Palisades, Altadena, Malibu, Pasadena. The fires took the lives of 31 people, destroyed more than 16,000 structures.

On this sober anniversary, we not only honor the lives lost, we also honor the firefighters and first responders who faced unimaginable conditions - a firestorm in the middle of winter, with hurricane-force winds. What they did was miraculous and heroic. They went to battle against impossible conditions, in the wind and in the dark, flying dangerous night missions over the firestorm.

Today, many members of Cal FIRE are in the audience, along with community groups, business owners, and, most importantly, survivors of the Eaton and Palisades fires. Can you all stand up? I want everyone to give you a big round of applause for your resiliency, your courage, your strength.

Look, Los Angeles just finished the fastest debris removal in American history. We provided mortgage relief. We committed $2.5 billion for recovery efforts. I've signed 27 executive orders. You've passed a dozen-plus bills to remove time-wasting red tape, allowing survivors to begin rebuilding. And it's true, the city and county have issued over 2,500 building permits.

But it's not good enough. Not nearly enough. We need to turbo-charge our efforts to rebuild these communities. That's why we're working to create a new rebuilding fund to close the gap between insurance payouts and the cost of rebuilding - helping survivors get back in their homes even faster.

Contrast these efforts with Donald Trump's complete failure to act. He is refusing to even send a disaster recovery request to Congress for $33.9 billion, supported by our entire California delegation, Democrats and Republicans, to support the victims in Los Angeles. It's time for the President of the United States to act like a President for ALL the United States. It's time to fulfill the promises he made and deliver for the people in LA.

There is no doubt - this has been a challenging year, not only because of these fires, the federalization of the National Guard, the assault on our democratic norms and institutions. And yet, one of our finest.

Because hardship does not merely wound us; it reveals us.

The story of California has never been the story of ease. It has been the story of effort, strengthened by trial and enlarged by the people who refuse to give up on one another. We have built something that is not perfect, not finished, but real; always moving forward - like the rivers that define our landscape, our people are unstoppable.

We're home to more Americans than any other state. Culture, food, music, movies, AI, biotech, quantum computing, agriculture - it all happens here first.

We don't run from change, we drive it. We are proving that inclusive democracy works. We are proving that expanding human rights works. We are proving that legal immigration works. And we're proving that a progressive tax structure works.

California has never been about perfection. It's about persistence. The courage of our convictions and the strength to embody them. That's the California Way.

And it lights the path for the rest of the world.

The work we do, building a California where every person can see themselves, is never-ending. So we continue on because, years from now, we can tell our children we did not settle for the world as it was. We can say with pride: we built something worthy of them. We built the future.

Thank you, California.