Yesterday, Governor Gavin Newsom gave his last State of the State speech to the legislature in advance of the 2026 session. Coverage of the speech focused on how Newsom compared and contrasted his leadership of California versus President Donald Trump's leadership of the country.
Below are some excerpts from his speech, which mostly steered clear of issues related to transportation, air pollution, and even Climate Change. However, there was robust discussion of the state's housing crisis.
You can read the entirety of the Governor's speech here, and watch it here.
Excerpts
Climate/Energy : 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.
Climate/Personal Finance : 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.
High Speed Rail : 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.
Housing/Affordability : 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.
Housing/Homelessness : 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!
