By Yue Stella Yu, CalMatters
This story was originally published by CalMatters. Sign up for their newsletters
Photo: Gov. Gavin Newsom speaks during the State of the State address in the Assembly chamber at the state Capitol in Sacramento on Jan. 8, 2026. Photo by Miguel Gutierrez Jr., CalMatters
January 9, 2026 (Sacramento) - Gov. Gavin Newsom’s office on Friday forecast a “modest shortfall” of $2.9 billion for the upcoming fiscal year, down sharply from previous estimates in a nearly $349 billion budget proposal that relies heavily on continued windfalls from tech and AI stocks.
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