SACRAMENTO, Calif. — Gov. Gavin Newsom made several direct and indirect appeals to California lawmakers during his State of the State speech Thursday morning, mapping out how he hopes to work with them in the new legislative session.

The governor, who has emerged as a likely candidate for the 2028 presidential race, spent much of his hourlong speech spelling out the triumphs of his administration and extolling the values of California. He made the speech in the Assembly chambers for the first time since 2020.

“The reason I haven’t been back here for a few years is, as you know, I have no problem speaking, and perhaps a little more long-windedly than people like, but when it comes to the written text, that has never served me well,” he said.

The governor will have to work closely with Assembly Speaker Robert Rivas, a Hollister Democrat, and Senate pro Tem Monique Limón, a Goleta Democrat, as well as the respective budget chairs to get his proposed budget passed, but there are a few other proposals that will need the Legislature's cooperation.

1. Restructure the state’s education system

The governor’s office announced Thursday morning that he would attempt to move the state Department of Education to the control of the executive branch as part of his spending plan for the upcoming fiscal year.

“I believe that’s important and long overdue reform,” Newsom said during his speech, saying it would “allow the state superintendent of public instruction to align our educational policies from early childhood through college much more efficiently.”

However, some state officials expressed concerns with the plan.

“California voters rejected four times the elimination of the independent state superintendent,” said Al Muratsuchi, a Rolling Hills Estates Democrat who is chair of the Assembly Education Committee.

“While this is not proposing to eliminate the position, it appears to be a significant shift in power from the state superintendent to the governor, and so that that is a concern.”

Muratsuchi said he believed the language of the proposal would come out in a budget trailer bill, and he looked forward to discussing the idea in committee.

State Superintendent Tony Thurmond was present at the speech and said afterward that on this issue, he and the governor “couldn’t be more misaligned.”

“I’m still looking to understand the rationale about how this will benefit California students.”

Thurmond said shifting the management of the Department of Education to under the governor’s purview would put the system at risk if Californians elect a governor who is less supportive of public education.

2. Reduce the cost of housing construction and challenge private equity

During his speech, Newsom also referenced a proposal that the Legislature has already started working on — reducing the cost of housing development.

“I look forward to working with the Legislature this year, particularly to reduce the cost of construction, utilizing new building methods and technology — worker-centered reforms that bring our brothers and sisters in labor along with us.”

The Legislature’s Select Committee on Housing Construction Innovation met this week for an informational hearing.

He also referenced a new idea, to crack down on private-equity firms buying up homes. He said he wanted to “combat this monopolistic behavior, strengthen accountability and level the playing field for working families,” potentially through the tax code.

In the chambers, Newsom’s announcement prompted state Sen. Jesse Arreguín, a Berkeley Democrat, to stand and applaud.

“This is going to make an impact,” Arreguín said. The senator pointed out the tax code approach could be a better route than prior efforts to prohibit the purchase and acquisition of single-family homes by corporations and investors.

“That’s kind of hard to implement, and that’s why those bills have never moved, but we have to do something.”

The private equity crackdown idea is suddenly very much in the public consciousness after a similar effort was announced by President Donald Trump on social media Wednesday.

3. Think big on online safety for kids

Newsom told legislators he was proud of them for sending him bills related to age verification, chatbot safety and parental controls in 2025. However, he also pointed to a recent change in Australia that prohibits children under 16 years old from being on social media.

“Some of those headlines in Australia start making you think: Are we doing enough? Can we do more?”

Newsom’s wife, Jennifer Siebel Newsom, has been a staunch critic of children’s use of social media, and several lawmakers have expressed wanting to go further in reigning in tech and AI companies that market to children. The governor has walked a tightrope on the AI question, vetoing a bill last year that would have put strict limits on how AI chatbots can interact with children, and approving a much narrower proposal.

“That innovation presents incredible opportunities, and is a centerpiece of so much of our economic activity right now,” said Assembly Budget Chair Jesse Gabriel, an Encino Democrat. “But at the same time that understanding that there are challenges there — the challenges that go with the opportunities.”

4. Be business-friendly

Newsom made several references to his budget proposal, being released Friday, but the most explicit ask he made of the Legislature was that it reauthorize the CalCompetes tax credit program for another five years.

The program was created in 2013 and has awarded tax credits to over 1,200 businesses.

Newsom pointed out several: aerospace engineering in Torrance, fusion research and development in San Leandro, and a steel mill newly built in Kern County.

The request comes amid continued criticism of the governor that California is not business-friendly due to an intense regulatory atmosphere.

Republican lawmakers invoked that criticism as they took their return shot at the governor during their State of the State response video.

“Take a walk downtown in Gavin Newsom’s California, and you’ll see businesses boarded, homeless defecating and getting high in plain sight, and drug dealers operating with impunity in the heart of once-vibrant communities,” said Sen. Brian Jones, a Santee Republican.

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