Friday, January 9, 2026
Press Contact: Sumeet Bal, Director of Communications, 917-647-1952, [email protected]

Governor Strengthens Education Legacy, but Housing, Transit and School Facilities Demand Same Bold Moves to Address Affordability

Sacramento, Calif.—Though still projecting a $2.9 billion deficit, Governor Newsom’s $248.3 billion budget proposal offers some cause for optimism: no cuts to critical safety net programs, and a $1 billion investment to sustain and expand community schools. We particularly applaud the governor’s commitment to transformative education investments that are showing results—honoring the Local Control Funding Formula with its COLA and doubling down on community schools that are working. Governor Newsom has also delivered transformative investments in some areas that have changed lives—from community schools to universal meals, from mental health supports to transitional kindergarten. These achievements deserve recognition and have proven what’s possible when California leads with its values. 

But the question Governor Newsom asked in yesterday’s State of the State: “Who do you stand for?” demands the same bold investment in protecting renters, supporting affordable housing, public transit and school facilities in low-wealth communities. As we face an unprecedented federal assault on civil rights and social programs, an affordable housing and homelessness crisis that keeps getting worse, and existential risk to our public transit systems, it is clear that structural budget reform on revenue as well as expenditure priorities is essential and urgent. Yet this budget proposal offers status quo funding that won’t address these crises. Right now, the wealthiest Californians are thriving while teachers and students in lower-wealth communities educate and learn in dilapidated dangerous classrooms, healthcare workers face eviction, and students drop out because they’re homeless.

Just as the governor invested boldly in community schools, California must now invest boldly in affordable housing and public transit, and fix the unequal access to quality school facilities. To do so we cannot rely on boom-and-bust volatility. Seven years after promising to fix California’s “notoriously volatile tax system”—a promise absent from yesterday’s speech—we need the top 1% to pay a truly fair share through structural revenue reform: wealth taxes, payroll taxes on high earners, closing corporate tax loopholes, and speculation taxes on luxury real estate. The real question isn’t whether our tax system is progressive—it’s whether it’s progressive enough to meet Californians’ needs and raise sufficient funds for transformative and sustainable investments across education, housing, and transit.

“The boom-and-bust cycle isn’t just volatility,” said Guillermo Mayer, President & CEO of Public Advocates. “It’s a choice to let billionaires dictate whether teachers, nurses, and working families can afford to live and thrive in the state they built.”

Education’s Promise and Unfinished Business

The governor’s education investments prove what’s possible when California leads boldly—now that same courage must extend to school facilities and permanent revenue. “We commend Governor Newsom’s continued commitment to transformative K12 investments that have made a real difference in improving student outcomes. From $1 billion for community schools to fully funding transitional kindergarten, bolstering after-school and summer programs and universal meals, this budget proposal delivers hope for students and families,” said John Affeldt, Managing Attorney for Education Equity.

“The governor deserves particular credit for proposing to make community schools a permanent fixture in our education landscape. The new ongoing $1 billion investment will enable the state to expand the community school model to nearly 3,500 schools, almost a third of all schools. As a recent Learning Policy Institute report found, California’s community schools have cut chronic absenteeism by 30% compared to similar schools, reduced suspensions by 15% overall and delivered learning gains in English, equivalent to 151 extra days of instruction for Black students. More than 1,800 students, families, and educators across 12 counties shared through a recent California Partnership for Future of Learning  statewide listening campaign that these schools are also delivering support and safety for California’s most vulnerable communities.

We were disappointed though to see no attempt in this initial budget proposal to address the single biggest “affordability” crises for low-income communities when it comes to our schools.  As highlighted by a recent Public Advocates lawsuit, older school facilities across the state are disproportionately deteriorating in low-wealth communities because those districts are unable to afford capital renovations. Low-wealth school districts have to tax their communities more and are able to raise less locally for repairs. In turn, the state systematically provides less in modernization funds to poor districts whose local matches are smaller or non-existent, leaving a huge wealth gap in school facility quality. It is critical that Governor Newsom address this unfair burden on low-wealth communities before he leaves office and put an end to an indefensible, decades-long wealth-based discrimination.

Going forward, we recognize too that our state cannot continue to rely on temporary AI stock market bubbles to build the state we all deserve. California needs more robust ongoing, permanent revenue streams to support our schools and healthy communities. We cannot ask teachers to transform students’ lives while those same teachers are being priced out of the communities they serve. California built Silicon Valley’s talent pool through bold investments in public education. It’s time that investment be reciprocated through progressive revenue that ensures every child, in every zip code, has access to world-class schools,” Affeldt added.

Higher Education: Progress Threatened by Federal Attacks

California’s higher education systems have seen historic investments, but affordability gaps persist—and federal attacks threaten the progress we’ve made. “The proposed budget underscores why sustained investments like the Compact and the Roadmap matter—they improve student outcomes. We must pair improvement in student outcomes with lowering the cost of college,” said Sbeydeh Viveros-Walton, Director of Higher Education. “Despite progress, college costs remain high, affordability gaps persist for financial aid recipients, and low-income students continue to shoulder disproportionate debt. California’s financial aid system also leaves too many students behind—particularly older, re-entry, and non-traditional students—due to outdated eligibility rules. We urge the governor and legislature to increase the Cal Grant B award so students can better withstand the current affordability crisis. While high school FAFSA completion has rebounded after federal rollout failures, community college students remain far less likely to complete FAFSA or CADAA. The administration and legislature should dedicate a portion of the proposed $100 million in flexible student support to close this gap and advance policy solutions that better serve community college students.” 

“The governor’s proposed budget highlights significant increases in support over the last five years for our higher education systems and students. During that time, we have seen a significant increase in Cal Grant recipients and dual enrollment programs, and historic investments in basic needs services and affordable student housing. These investments reflect our values of ensuring that higher education—still the best pathway out of poverty for low-income students—is accessible for all Californians, not just the most wealthy,” said Jetaun Stevens, Deputy Director of Higher Education Equity & Senior Staff Attorney. ”However, our public higher education systems, the students they serve—and our values—are facing unprecedented attacks. We must do more to defend the progress we’ve made to ensure low-income and marginalized students have a real shot at achieving their dreams. With 60% of students reporting housing and food insecurity as an ongoing barrier to completing college, we must double down on investments that make college affordable to low-income Californians including further investments in affordable student housing and emergency housing grant resources.”        

“We also look forward to partnering with the Newsom Administration as the California Education Interagency Council is implemented to break down long-standing silos across higher education, workforce, and social services systems,” said Viveros-Walton. “Strong coordination is essential to ensure California’s investments translate into real economic mobility and shared prosperity. We urge the administration to move swiftly and decisively in launching the Council and fully support the governor’s proposed $1.5 million investment to make this cross-agency collaboration effective and accountable.”

Housing: Remove the Sunset on Tenant Protection and  Invest at Scale

The governor said we’re in the “how” business. We know how to protect renters—remove the sunset. We know how to house families—build social housing. “Millions of California families spend more than half of their income on rent, but we are told to wait and see what the May Revision brings. Waiting is a luxury renters don’t have,” said Michelle Pariset, Director of Legislative Affairs. “In his State of the State address, Governor Newsom highlighted the success of the Tenant Protection Act, which currently expires in 2030 —after he leaves office. Without spending a dime, the governor can secure his legacy on tenant protections by removing the sunset provision, permanently protecting renters from gouging and no-fault evictions. We urge him to work with the legislature to get this done immediately. California renters cannot afford to go back to unchecked rent increases. In yesterday’s address, the governor asked, “Who do you stand for,” and we hope he’ll stand  for tenants facing rising rents and eviction, not landlords making unlimited profits.”

“But tenant protections alone will not solve the affordability crisis,” Pariset added, “The free market will never build the homes affordable to low-income families that California needs. We cannot streamline our way to sufficient affordable housing. Public investment in permanently affordable housing at the scale of the problem is essential. The May Revision must include funding proportionate to Californians’ cry to address affordability. ”

Transit: The Fiscal Cliff Working Families Cannot Afford

Working families depend on public transit to reach jobs and essential services, but status quo funding won’t prevent the looming fiscal cliff.  “Transportation is the second-highest household cost after housing, and it’s crushing working families’ budgets,” said Laurel Paget-Seekins, Senior Transportation Policy Advocate. “We are pleased to see funding the legislature set aside for free transit passes remains in the governor’s proposed budget, but the urgent need for additional state funding to operate transit service must also be addressed.” With state revenues surging from an AI boom that depends on California’s infrastructure, we have the resources to make buses frequent and reliable, to expand transit service, and to prioritize people over cars. The billionaires profiting from California’s workforce should help fund the transportation system that the workforce depends on. That’s not radical—it’s reciprocity.”

A Call for Structural Change

Governor Newsom’s final budget proposal offers a choice: Will California paper over cracks with one-time windfalls, or will we build the permanent revenue foundation that ensures teachers can afford to live near their schools, students can afford college housing, renters can stay in their homes, and working families can reach their jobs? The investments in community schools prove what’s possible when we lead boldly. Now that same courage must extend to housing, transit, school facilities, and the progressive revenue reform that makes all of it sustainable.

Seven years ago, the governor promised to fix our volatile tax system. His final budget in June is the last opportunity to deliver on that promise—not just for his legacy, but for the millions of Californians whose ability to call this state home depends on it.

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Public Advocates Inc. is a nonprofit law firm and advocacy organization that challenges the systemic causes of poverty and racial discrimination by strengthening community voices in public policy and achieving tangible legal victories advancing education, housing, transportation equity, and climate justice.