Gov. Gavin Newsom to deliver final State of the State address amid $18 billion budget deficit

SACRAMENTO, Calif. (KGO) — Governor Gavin Newsom will deliver his final State of the State address Thursday morning before a joint session of the Legislature at the California Capitol, the first time Newsom will do so in-person since the pandemic.

The two-term governor faces a projected $18 billion budget deficit in his final year in office, setting the stage for tough decisions and policy battles.

“It’s just going to be a tough way for him to go out,” said State Sen. Dave Cortese, D-San Jose. “There are going to be policy fights this year in terms of how to close the deficit. We are at a point where we can’t cut our way out of it.”

Housing affordability is expected to be a key focus. State Sen. Jesse Arreguín, D-Oakland, who chairs the Senate Housing Committee, said he anticipates Newsom will continue pushing for solutions.

“I see housing as a key part of our affordability agenda,” Arreguín said. “We’ve done a lot to streamline the regulatory process. Now we can look at how we can incentivize and innovate housing production. I know the governor supports that goal.”

Assembly Republicans released a prebuttal Wednesday, criticizing Newsom’s record on affordability and governance.

“Housing is now less affordable than ever. Families are leaving the state. Young Californians are locked out of home ownership. The promise faded,” the video said. “Californians pay the price for years of mismanagement.”

Political consultant Jim Ross said Newsom will likely use the address to shape his legacy and future ambitions.

“The last things he does in office are going to be the things that people remember,” Ross said. “So I think he’s going to be very focused on an agenda this year that is going to put him in the position he wants to be, to run for president.”

Newsom’s address begins at 10:30 a.m. Thursday.