By Chris Hoene, Special for CalMatters

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The podium prior to the Governor’s budget proposal presentation for the 2026-27 fiscal year, at the Capitol Annex Swing Space in Sacramento, on Jan. 9, 2026. Photo by Fred Greaves for CalMatters

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California has built a reputation as a bulwark against President Donald Trump’s agenda. But when it comes to the state budget — California’s most powerful tool for change — that resistance fades. 

Gov. Gavin Newsom’s 2026-27 budget proposal includes no investments to protect Californians from federal cuts and continued threats. 

Federal policymakers have slashed health care, food assistance and other basic supports to pay for ICE’s supercharged budget, as well as tax cuts for the richest households and the most profitable corporations. 

So far, California’s budgetary response has been cautious, constrained, and unremarkable. 

When Newsom took office in 2019, he framed his vision as a “California for All,” that would ensure families could meet basic needs like housing, food and health care. That promise now collides with a budget proposal that fails to match the vision with meaningful solutions. 

Today, families across the state are facing increased housing costs, food insecurity, threats to health care and ongoing risks to their well-being. Recent cuts enacted through Trump’s signature megabill, H.R. 1, will deepen these challenges and increase poverty as the cuts take effect. 

The stakes are not abstract. Federal cuts to Medi-Cal could leave up to 2 million Californians without health coverage and cost the state tens of billions of dollars in federal funding each year. 

Cuts to SNAP could cost California $2.3 billion to $5.1 billion annually and put more than 3 million households at risk of losing some of their food assistance. 

California continues to have the highest poverty rate in the nation, tied only with Louisiana. It’s time for the governor and the Legislature to seriously consider common-sense solutions to raise the revenues needed to meet the needs of all Californians. 

Yet, even as the state is poised to lose billions in federal funding, and millions of Californians are losing access to health care and food assistance, the governor wants the state to continue spending billions on corporate tax breaks. 

Some of these state tax breaks benefit the same highly profitable corporations and wealthy individuals that just received unprecedented federal tax giveaways under H.R. 1, which directs more than 40% of its tax cuts to the wealthiest 5% of Americans. (The bottom 20% of the US populace will receive less than 1% of the federal tax breaks.) 

California has tools to protect the people who call the Golden State home, and none of these options require panic, austerity or accepting the harm imposed on us by Trump and congressional Republicans. 

Nearly half of profitable corporations filing taxes in California pay no more than the $800 minimum state tax, despite collectively reporting billions in profits. 

The state can start collecting more by ending the “water’s edge” loophole, the state’s largest corporate tax break, which allows corporations operating internationally to avoid $3 billion to $4 billion in state taxes each year by stashing profits in offshore tax havens. 

In addition, some of the world’s most profitable corporations claimed research and development tax credits, which cost the state more than $2.5 billion in 2023 alone. Closing these ineffective and misguided legal loopholes would generate ongoing revenue to help counter federal harm and strengthen economic security for all Californians. 

The 2026-27 state budget will help define Governor Newsom’s legacy. History will not judge this moment by speeches and social media posts, but by the answer to the question: Were Californians more secure and better able to afford everyday necessities as Newsom left office — or were they more exposed to the harsh realities of Trump’s agenda? 

Newsom’s last budget, which will be finalized later this year following negotiations with legislative leaders, will answer that question and determine if the promise of a “California for All” is met through real action or if it’s kicked down the road, to his successor. 

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.