Gov. Gavin Newsom used his final “state of the state” address to pitch California as a beacon for the future — a double-edged sword at best for the 2028 presidential hopeful.
In the roughly hour-long speech at the Capitol building in Sacramento, Newsom blasted President Donald Trump’s “carnival of chaos” and painted a rosy picture of homelessness, public safety, affordability and education — all major pain points for Californians who face the highest home prices in the nation, low-ranking schools and rampant homeless encampments in many cities.
“We are a beacon. This state is providing a different narrative. An operational model, a policy blueprint for others to follow,” Newsom said, in contrast to what he described as a corrupt and authoritarian White House.
“This state, this people, this experiment in democracy, belongs not to the past, but to the future,” Newsom boasted.
It’s a “risky strategy” as the governor preps a likely presidential bid, said Jim Ross, San Francisco-based political consultant.
“He’s trying to run on California as California — I just don’t know if the rest of the country are going to see it the same way,” he said.
Others blasted Newsom’s speech as little more than spin.
“The only thing Gov. Gavin Newsom does well is he’s a very accomplished liar,” said Republican Assemblymember Carl DeMaio of San Diego.
The Economy
Newsom touted California’s massive economy — larger than most countries and driven by a booming Silicon Valley, Los Angeles’ entertainment industries, and a large agriculture sector.
“No state in America contributes more — none — to American greatness,” he said. “No state builds more ladders to success or sees around more corners.”
A strong economy, according to Newsom, led to a surprise $42.3 billion windfall over three years that will help the state resolve massive budget deficits that could reach $35 billion, per projections released in November. But that will not solve the state’s long-term fiscal problems as spending outstrips revenue.
Newsom didn’t mention California unemployment rate — 5.5% percent as of September, the nation’s highest, as residents struggle to cover costs in the infamously expensive state. Californians face some of the highest housing, gas and utilities prices in the country.
“I think there’s a real disconnect between Gavin Newsom and his California and the experience Californians are having on a day to day basis,” Ross said.
“His speech reinforce many Californians’ view that being governor — at least for the last few years — has been just a step to the next election.”
Homelessness
Newsom announced that unsheltered homelessness is dropping, citing “early data, just compiled.”
The early data shows a 9% drop statewide in unsheltered homelessness, a 10.3% decline in Los Angeles, and drops of 19% and 34.8% in Riverside and Contra Costa County, according to Newsom.
“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,” Newsom said.
Asked to clarify the source of the numbers, Newsom’s office didn’t immediately respond.
But any drop in homelessness would only offset the explosion in encampments and people sleeping outside during Newsom’s time as governor.
According to federal point-in-time counts, the number of unsheltered individuals in California ballooned from about 85,300 in 2018 to more than 117,400 in 2023 — a jump of 38%, according to the most recent completed statewide counts published by Housing and Urban Development department.
Education
The governor said big changes are coming to education — including a re-org of the Department of Education under the executive branch, a reform long recommended by the Legislature.
While Newsom boasted of California’s world-renowned University of California system, K-12 schools in the state haven’t fared so well.
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Despite billions committed to public schools, California K-12 schools consistently rank in the bottom half in terms of math, reading, and high school graduation rates. U.S. News and World report ranked California #43 in terms of college readiness.
Newsom unveiled “the most significant investments in public education in California’s history” as part of his budget proposal.
That includes a “record-breaking $27,418 per student,” Newsom said. “This budget will fully fund our universal [transitional kindergarten] program — and maintains our commitment to reduce class sizes to improve the quality of education for our youngest learners.”
Housing
The cost of housing is California’s “original sin,” as Newsom put it in his speech.
But it’s one that has grown markedly worse during his time as governor, despite a splashy promise eight years ago to built 2.5 million homes by 2025.
“We got to work in 2019, passing the strongest statewide renter protections in America,” Newsom said. “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.”
But so far, the reforms haven’t meant much to the average buyer facing some of the highest housing costs in the country.
The median home price in California has grown from about $610,000 in 2019 to some $887,000 today — an increase of more than 40%. And insurance costs, aggravated by major wildfires, have skyrocketed in many areas as insurance firms fled the state in recent years.
“In the last few months, six insurance companies announced their commitment to remain in, or expand their coverage, here in California,” Newsom said.
But, he acknowledged, “We have a lot more work to do to fully implement our sustainable insurance strategy.”
Infrastructure
In the speech, Newsom did what he does best: rattle off statistics with precision.
He bragged of 500,000 apprenticeships, $109 billion in infrastructure investments across 28,000 separate projects, a 2,300-megawatt battery storage project in Fresno, and 200,000 people “working to strengthen this state.”
On the infamous High-Speed Rail project, Newsom noted “50 major structures,” “60 miles of guideway,” and “2,270 parcels for right-of-way, procured.”
The rail project, which had an initial cost of around $33 billion and launch date of 2025, is years and tens of billions overdue.
Costs have ballooned to a range of $89 billion to $128 billion, according to Reuters, with service expected to begin in 2033 — 25 years after it was first approved by voters, and long after Newsom is out of office.
