UPCOMING KEY DATES

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• September 30: Last day for the Governor to sign or veto applicable bills passed at the end of session

• November 3: General Election

• November 30: Legislature formally adjourns the 2025–26 Regular Session

• December 7: 2027–28 Regular Session convenes at noon

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EDUCATION

 

Early Math Assessment Bill Reaches Governor

 

SB 1067, authored by Senator Akilah Weber Pierson, is awaiting action by Governor Newsom after clearing the Legislature.  This is an important step in addressing the fact that two-thirds of California eighth graders are below grade level in math.

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The bill would establish a statewide framework for early math diagnostic assessments for students in kindergarten through second grade. Beginning no later than the 2028–29 school year, schools would assess students’ foundational math knowledge and learning needs, with the goal of identifying students who may benefit from additional support earlier in their education.

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The legislation also directs the California Department of Education to develop guidance and resources on evidence-based math support, intervention and instructional strategies. The bill was presented to the Governor on Sept. 3rd.

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Check out the 21st Century Alliance's ad that was deployed across the Capitol in support of the bill here.

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State Budget Includes Changes to Education Governance

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The recently enacted 2026–27 state budget includes changes intended to improve coordination and accountability across California’s education system, including moving management of the Department of Education into the Executive Branch while modifying the role of the elected State Superintendent.

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To dive deeper, check out the 21st Century Alliance February briefing on state education governance, and why reform matters for kids' outcomes.

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The budget also includes a significant increase in special education funding, along with continued funding for universal school meals, transitional kindergarten and expanded child care.

 

FISCAL POLICY

 

Rainy Day Fund Reform Heads to Voters

 

California voters will consider Proposition 2, the Save for California’s Future Act, on the November ballot. Placed on the ballot by the Legislature through Assembly Constitutional Amendment (ACA) 20, the measure proposes changes to California’s Budget Stabilization Account, commonly known as the Rainy Day Fund.

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The proposal would modify the rules governing how the state deposits and withdraws money from its reserves, aiming to let California save more revenue during periods of strong growth and better prepare for economic downturns.

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Check out Steve Westly's San Jose Mercury News Op-Ed in support of Rainy Day Fund reform here.

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Budget Balances Near-Term Spending, but Longer-Term Pressures Remain

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California enacted a 2026–27 budget with no projected deficit for the current or following fiscal year. The agreement also sets aside more than $6 billion in anticipated revenue to ensure it comes in, rather than immediately committing it to ongoing programs.

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At the same time, the nonpartisan Legislative Analyst’s Office notes that the budget adds approximately $825 million in new ongoing annual spending once fully implemented. The budget also relies on several revenue and spending actions to maintain balance, highlighting the continuing challenge of aligning California’s ongoing commitments with a highly volatile revenue system.

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HOUSING

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State Streamlines Affordable Housing Financing

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California enacted a package of housing finance reforms this summer intended to reduce the time and cost required to build affordable housing.

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AB 179 restructures portions of the state’s housing finance system around a “One-Stop Shop” model designed to reduce duplicative reviews and coordinate state financing. The Administration estimates that the financing and fee changes could reduce affordable housing development costs by approximately $60,000 to $70,000 per unit.

The 2026–27 budget also provides $200 million for the Multifamily Housing Program and authorizes $500 million for the state Low-Income Housing Tax Credit program.

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CEQA Reform Heads to November Ballot

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Voters will also consider Proposition 45, which would amend the California Environmental Quality Act (CEQA) to speed up environmental review for certain "essential" projects—including housing, transportation, water, schools, and health facilities—by imposing a 365-day deadline for review and a 270-day deadline for courts to resolve related lawsuits. It maintains robust environmental reviews while addressing ways that CEQA has been abused to stop green infrastructure, housing and other important projects.

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OTHER POLICIES TO WATCH

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Wildfire Liability Overhaul Put on Hold

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Lawmakers ended the session without advancing a broader proposal addressing California’s wildfire liability framework and the long-term sustainability of the state’s Wildfire Fund.

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Legislative leaders said more work is needed before moving forward with major changes. Assembly committees are expected to continue examining wildfire liability, utility accountability and compensation for wildfire victims during the legislative recess.

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Sites Reservoir Moves Forward

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The State Water Resources Control Board has released a revised draft water-right decision for Sites Reservoir, moving the proposed 1.5 million acre-foot water storage project another step forward.

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Under the revised proposal, the project could divert up to 986,000 acre-feet annually from the Sacramento River, subject to conditions protecting water availability, water quality, fisheries and other water users. Written comments are due October 5, and the Water Board is scheduled to consider the proposed water-right decision and permit on November 4.

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UP NEXT

 

Bill Signings and Vetoes

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With the Legislature now in final recess, attention shifts to Governor Newsom, who has until September 30 to act on applicable bills passed at the end of session. The Governor’s Office is expected to announce legislative actions throughout the month as bills are signed or vetoed.

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