For Immediate Release: July 1, 2025

Contact: Tyler Bushnell, tyler.bushnell@nextgenpolicy.org 

The $321.1 billion 2025-26 state budget that has now been signed into law reflects the difficult program and policy decisions made by Governor Newsom and California’s legislative leadership to enact a balanced budget in the face of the current deficit and continuing fiscal uncertainty. 

SACRAMENTO – After weeks of intense negotiations, the California State Legislature passed and Governor Newsom signed into law the $321.1 billion 2025-26 State Budget. The May Revision revealed a $12 billion budget deficit and since that time California leaders have been reviewing, analyzing, and amending various aspects of the state budget to close the deficit, create a reserve, and protect vulnerable communities to the best of their ability given the circumstances.

The final State Budget foreshadows several external factors currently affecting California’s financial outlook, including repercussions of the Trump Administration’s tariffs as well as the fiscal uncertainty embodied in other federal funding cuts, program reforms, and policy changes. In an effort to both preserve state funds while also investing in essential programs, the final budget preserves important funding for School Meals for All and Healthy School Pathways, public transportation, and supports for students pursuing higher education, but clearly significant compromises in other big budget areas were also made, most notably to health and social services programs.

NextGen California feels heartened by the continued state investments in their key areas of focus, but remains wary about the budget picture in the months and years to come as pending federal actions loom heavy over California and state budget projections are mired in continued shortfalls.

NextGen California’s Executive Director, Arnold Sowell Jr., and members of the policy team share their reactions and what the final State Budget means for NextGen’s legislative priorities and Californians:

Statement from NextGen California Executive Director, Arnold Sowell Jr.:

“Our nation is presently faced with intense division, particularly with the federal government continuing to cut key funding for programs and services that support vulnerable populations – it’s unfortunately no surprise that these same issues are significantly affecting California’s fiscal outlook,” said Arnold Sowell Jr., Executive Director of NextGen California. “The final 2025-26 State Budget proposed by Governor Newsom and state leaders is a direct reflection of the challenges facing our country. Given this backdrop, we are thankful to Governor Newsom and state leaders who have worked hard to balance the budget and keep the needs of vulnerable Californians top of mind. Specifically, the budget preserves the good work done to date in several important areas, including the effort to combat climate change by investing in public transportation; addressing food insecurity; supporting students aspiring for higher education; and promoting workforce development, to name a few. Here at NextGen, we will continue to face these tough financial times head-on and are ready to work with Governor Newsom and State Legislators to continue building a more equitable, climate resilient, and prosperous California for all.”

Statement from NextGen California Legislative Director & Policy Advisor, Samantha Seng:

“We are grateful for our California leaders standing by our students and their families and clearly prioritizing them in the State Budget,” said Samantha Seng, Legislative Director & Policy Advisor for NextGen California. “In a tough budget year, the Governor and Legislature have maintained crucial state financial aid programs such as the Cal Grant and Middle Class Scholarship and invested more at community colleges to support especially vulnerable students These investments during these unprecedented times provide hope for students, to remain undeterred in their pursuit of their career goals and their full potential.”

Statement from NextGen California Policy Advisor, Jamie Pew:

“California cannot afford to stall in its progress on climate. We are grateful to see our state leaders prioritizing an essential public service and emissions-reduction strategy by upholding its commitment to save public transit in the Bay Area and statewide,” said Jamie Pew, Policy Advisor for NextGen California. “As the effects of climate change accelerate, so must our response. Already, federal clawbacks and the statewide deficit are eating into our climate ambition. California must quickly identify and implement a variety of new strategies to fund this transition – starting with the reauthorization and strengthening of our pioneering Cap and Trade emissions market program.”

Statement from NextGen California Research & Policy Advisor, Tiffany Germain:

“In the face of an incredibly tough budget, NextGen is grateful that California’s first-in-the-nation School Meals for All program remains fully funded – thanks to the leadership of Governor Newsom and our legislative champions,” said Tiffany Germain, Research & Policy Advisor for NextGen California. “At a time when difficult choices had to be made, this funding reaffirms a shared commitment to ensuring that every student in California has access to free, nutritious meals – reducing childhood hunger and strengthening our students well-being. We’re also grateful for the continued investments in key initiatives that support the success of our School Meals for All program such as: the Kitchen Infrastructure and Training (KIT) program and the Farm to School Incubator Grant. These programs help expand access to fresh, locally sourced meals. In addition, we also received another year of funding for the Healthy School Food Pathway program, which plays a vital role in supporting the school nutrition workforce and elevating the quality of food served in our schools.”

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NextGen California is a nonprofit advocacy organization that breaks down barriers and rebalances power in the State Capitol on behalf of all Californians.