Ad Hoc or Master Plan - Part 2

Assemblymember Dorothy M. Donahoe
who pushed the 1960 Master Plan through the 
Legislature (Donahoe Act)
 but died before it was signed.

In an earlier post (Aug. 26), we noted that bills were moving through the legislature that would enhance the ability of community colleges to offer 4-year degrees. And we called for a new Master Plan process rather than ad hoc policy from the legislature. The bills are now on the governor's desk. Whether he will sign or veto is unknown. The immediate issue regarding community colleges is more a concern for CSU than UC. But the absence of a Master Plan is a long run concern for UC.

From the LA Times: ...Newsom has not signaled his view. He has rejected previous attempts since 2024 to let community colleges grant nursing bachelor’s degrees, when he warned such moves could cause conflict among the state’s three higher education systems...

Full story at https://www.latimes.com/california/story/2026-09-01/california-community-college-bachelors-degrees-newsom-bills.

Less than meets the eye - Part 2

Undoubtedly, there will be public comment on AB 713 now on the governor's desk for signature or veto at the September Regents meeting (unless he vetoes it before the meeting). As we have noted previously (see Aug. 13 on this blog), the bill actually leaves the decision on whether UC can hire undocumented students to the Regents. It is a mandate for CSU and the community colleges but permissive for UC. 

From CalMatters: Is this the year that Gov. Gavin Newsom allows students without legal status to legally work at California’s public colleges and universities? A state bill with wide support from Democrats but opposed by Republicans seeks to do just that by adopting an untested legal theory that argues a 1980s federal law banning employment for people without legal status doesn’t apply to state agencies. But university leaders and Newsom worry that acting on the theory could put the state on another collision course with the Trump administration.

The bill easily cleared the Legislature Friday, including a yes vote from one Republican. The bill now heads to Newsom’s desk. Assembly Bill 713 by Assemblymember José Luis Solache, a Democrat from Lakewood, is seemingly straightforward: The University of California, California State University and community colleges cannot disqualify students without legal status from campus employment. If it becomes law, it would kick in Jan. 6...

Full story at https://calmatters.org/education/higher-education/2026/08/students-without-legal-status-california/.

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Bill at https://legiscan.com/CA/text/AB713/id/3191073. "This article shall apply to the University of California, unless it is found to be inapplicable to the university, then, consistent with Section 67400, this article shall apply to the university only to the extent that the Regents of the University of California, by appropriate resolution, make it applicable."

Bond - Part 3

UCOP News Release: UC Nobel Prize winners back $7.5 billion proposed investment in California research

UC Office of the President, August 28, 2026

University of California Nobel laureates Dr. Jennifer Doudna and Dr. Randy Schekman released the statements below following a deal announced today on UC-sponsored SB 895, authored by state Senator Scott Wiener. The bill would place a measure on the March 2028 state ballot to provide $7.5 billion for cutting-edge research addressing some of California’s most pressing health, environmental and technological challenges.

“California built the world’s most successful system of research universities,” said Jennifer Doudna, Ph.D., a UC Berkeley biochemist, Nobel laureate, and founder of the Innovative Genomics Institute. “SB 895 represents an important investment in the research infrastructure that will allow California to continue advancing scientific breakthroughs, improving lives, and driving innovation and growth for generations. We are grateful to Governor Newsom, Senator Wiener, and the legislature for their support of this important issue.”

“California’s strength and ingenuity depends on its ability to turn bold ideas into solutions to our most pressing problems,” said Randy Schekman, Ph.D., UC Berkeley professor of molecular and cell biology and Nobel laureate. “That’s why we need to invest in research and continue building on our nation-leading enterprise at UC. SB 895 will help protect the people and discoveries that drive billions of dollars in economic activity and improve lives across our state, and I thank Governor Newsom, Senator Wiener, and the entire legislature for leading the way on these efforts.”

Source: https://www.universityofcalifornia.edu/press-room/uc-nobel-prize-winners-back-proposed-investment-california-research.

For the record, Wiener is running to replace Nancy Pelosi in Congress as she retires from her San Francisco district. She, however, has endorsed another candidate. Newsom is running for you-know-what.

Bond - Part 2 (deadline for '28)

We noted back on August 17th that a $5 billion research bond backed by UC was passed by a state senate committee. While it is too late for that bond to appear on the upcoming November 2026 ballot, if enacted by the full senate by August 31st and then signed by the governor, it could appear in 2028. If not passed by August 31, the complete legislative process would have to be repeated.

Less than meets the eye

On Aug. 13, the state senate Appropriations Committee passed AB 713 which has as its goal the hiring by UC of undocumented students. The Regents originally were moving to allow such hiring but halted the effort after the UC general counsel opined that it would violate federal law. Note that when you read the actual provisions of AB 713, it still leaves the decision to the Regents. (There is no such exemption in AB 713 for CSU or the community colleges.) The bill still needs the approval of the full state senate and the governor's signature.

See the full text of the bill below:

Text of AB 713 - AB-713 Public postsecondary education: student employment

Article  3.8. Employment

66029. (a) The University of California, California State University, or California Community Colleges shall not disqualify a student from being hired for an employment position due to their failure to provide proof of federal work authorization, except in either of the following cases:

(1) Where that proof is required by federal law.

(2) Where that proof is required as a condition of a grant that funds the particular employment position for which the student has applied.

(b) The University of California, the California State University, and the California Community Colleges shall treat the prohibition on hiring undocumented noncitizens in Section 1324a(a) of Title 8 of the United States Code as inapplicable because that provision does not apply to any branch of state government.

(c) To the extent student employment is considered a “benefit” for purposes of federal law, this statute shall constitute authorization to provide that benefit for purposes of Section 1621(d) of Title 8 of the United States Code.

(d) The University of California, the California State University, and the California Community Colleges shall implement this article by January 6, 2027.

(e) This article shall apply to the University of California, unless it is found to be inapplicable to the university, then, consistent with Section 67400, this article shall apply to the university only to the extent that the Regents of the University of California, by appropriate resolution, make it applicable.

SEC. 2. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.

Source: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202520260AB713.

Hitting the Target

In the recent past, we have gotten used to state revenue forecasts falling below actual results due to unanticipated capital gains in personal income tax receipts from AI. We now have one month's cash report for July - the first month of the current fiscal year. Revenues were a bit ahead of the forecast made when the state budget was enacted last June. But the overage is not from income taxes which fell a bit short of forecast estimates. Corporation taxes were the main source of the overage. And the sales tax ran a bit ahead of forecast values, and by more than pure inflation would suggest compared to the same time last year. So the general economy, as opposed to the world of finance, seems to be doing OK.

It's only one month, of course, but if this becomes a trend, it would mean no unpleasant surprises from the state for UC while the governor finishes out his term, i.e., until January. (There is always room for federal surprises, however.)

The July 2026 controller's cash report is at:

https://www.sco.ca.gov/Files-ARD/CASH/July2026StatementofGeneralFundCashReceiptsandDisbursements.pdf.

New Regent

Governor Newsom announces appointments 7.22.2026 [Excerpt]

...Scott Galloway, of Gulf Stream, Florida, has been appointed to the University of California Board of Regents. Galloway founded Section in 2019 and has served on the faculty of NYU Stern School of Business since 2002. Galloway was the Founder and Chairman at L2 from 2010 to 2019. He was the Founder of Red Envelope, where he held multiple positions from 1997 to 2008, including Chairman and Director. Galloway was the Founder of Prophet Brand Strategy, where he held several positions from 1992 to 2002, including Chairman and CEO. He served as a Member of the Board of Directors for the New York Times Co., a Board Member of Urban Outfitters, a Board Member of Panera Bread, and a Board Member of Berkeley Haas. He earned a Master of Business Administration degree from University of California, Berkeley and a Bachelor of Arts degree in Economics from University of California, Los Angeles. This position requires Senate confirmation, and there is no compensation. Galloway is a Democrat...

Source: https://www.gov.ca.gov/2026/07/22/governor-newsom-announces-appointments-7-22-2026/.

===

From Politico: ...Galloway, a Democrat, has written prominently about issues of loneliness and isolation facing young men, which Newsom, a likely presidential contender, has sounded the alarm about. The governor last year signed an executive order aimed at addressing a rise in suicide rates and disconnection among young men and boys in the state. A professor of marketing at NYU, Galloway has founded several companies in the consulting and digital research fields, and served on the board of directors for Urban Outfitters, Panera Bread and The New York Times.

Galloway has been somewhat critical of higher education, arguing on a Chronicle of Higher Education podcast in March that some elite universities are making a “concerted effort to sequester supply” by hiking tuition and artificially keeping enrollment low, suggesting that such schools should lose their tax-exempt status. But he praised the UC as one of the systems “doing God’s work” to expand access by expanding first-year class sizes and summer and night classes.

Galloway, who lives in Florida, received his bachelor’s degree in economics from UCLA and an MBA from UC Berkeley. He has given to both schools — $12 million for students pursuing non-traditional pathways and $4.4 million to UC Berkeley for a fellowship for students from immigrant families.

Full story at https://www.politico.com/news/2026/07/22/newsom-appoints-podcaster-scott-galloway-uc-board-regents-01008165.

From Wikipedia: Galloway was born in San Diego and grew up in Los Angeles, California. His father was a Scottish immigrant to the United States who worked as a sales executive. His mother, a Jewish immigrant from London, England, worked as a secretary... Galloway teaches brand management and digital marketing to second-year MBA students. Much of his research concerns big tech, including Alphabet, Amazon, Meta, and Apple, which he refers to as "The Four" or "the Four Horsemen". His first book, The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, was released in 2017 and analyzes the big four's peculiar strengths and strategies, novel aspects of their economic models, tactics of expansion, as well as resulting social and individual consequences.

In September 2018, Recode and the Vox Media launched Pivot, a weekly news commentary podcast co-hosted by Kara Swisher and Galloway. In February 2020, Galloway launched The Prof G Show, a weekly podcast answering listener questions on business, money, and technology. On September 28, 2021, CNN announced that Galloway would be a host on its CNN+ streaming platform, but the platform went off the air shortly after launching.

In 2022, Galloway's weekly newsletter No Mercy/No Malice won the Webby Award and Webby's People's Voice Award for best business, news and technology websites and mobile sites...

Full story at https://en.wikipedia.org/wiki/Scott_Galloway_(professor).

===

Galloway interviewed in The Free Press: ...I think Trump is president because of failing young men. If you look at the three groups that pivoted hardest from blue to red, 2020 to 2024, you start with Latinos and people under the age of 30. And the reality is, for the first time in our nation’s history, a 30-year-old isn’t doing as well as his or her parents were at 30. They’re 24 percent less wealthy than people under the age of 40 were 40 years ago. Meanwhile, my generation is 72 percent wealthier than we were 40 years ago. The majority of our economic policies are nothing but an elegant transfer of wealth from the young to the old. So they’re fed up, and all they know is they’re not doing well, so they just want change.

And then the third group, and the most interesting one, that pivoted hardest from blue to red, was 45- to 64-year-old women. And my thesis is that they’re mothers. A lot of women in the United States will vote for whoever they perceive is best for their husbands and their sons. And when your son is in the basement playing video games and vaping, you don’t give a shit about the territorial sovereignty of Ukraine. You just want change.

Struggling young men are always the fire that moves. People will come along, tell them their economic problems are the fault of immigrants, or that women’s ascent is responsible for their descent. Radical jihad has always leveraged failing young men, right? Fight for us and die, there’s 12 virgins waiting for you. ISIS took sex slaves and gave them to their soldiers as part of their military strategy.

The natural state of being is an unchecked economic system where you don’t redistribute capital. A small number of men are really talented, really fortunate, inherit wealth, and they get to engage in Porsche polygamy and have a disproportionate number of mating partners. And the bottom 90 percent of men have fewer and fewer. That rage or dissatisfaction can be channeled into unproductive means.

The greatest innovation in history wasn’t the iPhone or vaccines; it was the American middle class, and it wasn’t an accident. Seven million men returned from war in uniform. They were fit. We put a bunch of money in their pockets to make them economically viable, which made them more attractive to women. This led to huge household formation, a baby boom, productive, loving households. Then they brought non-whites and women into this prosperity through great social progress, great legislation. We decided to transfer opportunity and money back from the most fortunate into the American middle class, but that is not the natural state of being.

If you don’t figure out policies that create forward-leaning investments in technology and education and give young people a fighting chance, you’re just going to have an unstable society. You’re going to return to the natural order of a small number of people having all of the opportunities, which just creates instability. In some ways, I think we’re returning to what has typically been the natural order of economies for the last several thousand years...

Full interview at https://www.thefp.com/p/scott-galloway-on-the-mating-crisis.

State Cash Report

The story of fiscal 2025-26, the year that ended last June 30th, was one of underestimating state revenues, as the latest report from the state controller illustrates.*

On the other hand, disbursements were more or less accurately forecast when the state budget for 2025-26 was enacted and overestimated at the time of the May revise.

The state still has a significant reserve of cash in various accounts, so the prospect of the state handing out IOUs anytime soon, as in the Great Recession, is nil. All of this can be seen on the table below:

We don't yet have the budgetary summary numbers from the Dept. of Finance for the current year 2026-27. Xavier Becerra, the de facto incoming governor (since California no longer elects statewide Republicans) will spend his first 6 months under the Newsom-enacted budget. The budget he will present in January 2027 for 2027-28 will largely have been put together by the Newsom team, given the pressures of timing. So, if he has very different priorities from Newsom with regard to UC - and there is no indication that he has - that would be a surprise. Surprises, if they occur for UC, are more likely to occur from changes in economic activity and the stock market than from political turnover in Sacramento.

---

*https://www.sco.ca.gov/Files-ARD/CASH/June2026StatementofGeneralFundCashReceiptsandDisbursements.pdf.

Two Months of the Guv

As blog readers will surely know, Gov. Newsom is termed out and running a not-a-campaign for president in 2028. And as blog readers will also know, we have tracked the governor's activities and preserved them, along with other relevant happenings since the pandemic. We used to do this tracking on a quarterly basis but the governor has been so very busy, especially with his not-a-campaign, so we have shifted to bimonthly collecting.

You can find the videos we preserved for May and June at:

https://archive.org/details/newsom-may-june-2026.
 

Novel Regent

Usually, stories about UC regents don't appear in the Entertainment section. But Regent Greg Sarris is an unusual exception.

From the LA Times: On a Monday morning in California, Sarris sits in his sleek office at the Federated Indians of Graton Rancheria in Rohnert Park. Sarris, 74, has served as chairman of the Federated Indians of Graton Rancheria for more than 30 years. In his office, diplomas and academic certificates crowd the walls. A framed poster for the 2023 film “Joan Baez: I Am a Noise” hangs nearby — she’s a close friend. Behind him, an American flag ripples in the distance outside the window, blurred by the summer heat. Just up the road sits a multibillion-dollar tribe-owned casino, Graton Resort & Casino — a project the writer oversees. “I had never been in a casino. I have a PhD in modern thought and literature from Stanford,” says Sarris.

How does an accomplished author find himself at the helm of a multibillion-dollar casino enterprise? It’s a question that still puzzles Sarris. “I told them if we can raise our people and become a platform for social justice and environmental stewardship to benefit Indian and non-Indian alike, I’ll do it.” ...

Before his stint as a reluctant casino mogul, Sarris was a prolific author and university professor at UCLA and Sonoma State. In 2023, he was appointed a regent of the University of California by Gavin Newsom. Over the course of his career, he published six books, and his novel “Grand Avenue” became an HBO original film in 1996...

In 1952, Sarris’ teenage mother gave him up for adoption, her family hoping to evade the embarrassment of their Jewish daughter becoming pregnant by a Native American Filipino man. Sarris grew up in a white family in Santa Rosa alongside three siblings. His adopted father, George Sarris, became abusive, causing Greg to flee the house with his adopted mother’s blessing. “God bless her. She let me go out and live on ranches and run with other people to get away from him.”

At age 30, Sarris uncovered the identities of his birth parents and learned of his Native heritage. He learned his birth mother was buried in a pauper’s grave at the Calvary Catholic Cemetery in Santa Rosa, with “nothing to mark her grave but an upside-down horseshoe that has her name in it.” In the opening pages of the novel, a dedication to her: Bunny Hartman...

...The Graton Resort & Casino, launched by Sarris over 12 years ago, now plays a vital role in supporting the Pomo Indian community. “I promised early on: roof over everyone’s head, an insurance policy in every pocket and a college degree paid for,” he says. “We give $2.5 million a year in perpetuity to the University of California, so that all California Indians can go to the University of California tuition-free.” The casino has funded theater programs, youth writing intensives and revenue sharing with neighboring tribes...

Full story at https://www.latimes.com/entertainment-arts/books/story/2026-06-24/graton-resort-casino-greg-sarris-native-history-author.

---

As blog readers will know, the feds are looking into Gov. Newsom's finances and those of his wife. It is unclear that anything illicit has been found. The California practice of "behested" payments, although not illegal, doesn't have a good look. Regent Sarris may be pulled into that issue. From the LA Times:

...In 2020, [Jennifer] Siebel Newsom founded the California Partners Project, a nonprofit focused on improving gender equity in the workplace and the safety and well-being of children in online spaces. She does not collect compensation from the nonprofit or serve on its board. It hosts an annual “gender equity summit” and provides resources for parents on issues such as social media safety and child mental health. The California Partners Project also does not publicly disclose its donors in its tax filings, but much of the nonprofit’s funding appears to come from behested payments. Siebel Newsom does not receive a salary from the organization.

Since its founding, the Newsoms have steered more than $5 million to the nonprofit via behested payments, according to a review of the disclosures. While many donations to the California Partners Project come from charitable foundations, it also received hundreds of thousands from companies including Silicon Valley Bank, Pinterest and the charitable arm of Blue Shield of California. 

Its biggest funder is the Federated Indians of Graton Rancheria, a Sonoma County tribe that operates a casino in Rohnert Park and spends heavily in state and federal elections. The tribe has given $2.3 million to the nonprofit since 2022. In June 2023, Newsom appointed tribal Chairman Greg Sarris to the University of California Board of Regents. Newsom has also supported efforts by the tribe to block a smaller tribe from building a casino in nearby Vallejo...

Full story at https://www.latimes.com/california/story/2026-06-25/newsom-says-wife-is-target-of-trump-heres-what-we-know-of-her-finances.

You have to read between the lines

University of California President James B. Milliken... issued the following statement on the 2026–27 final state budget:

I am grateful to Governor Newsom and the state legislature for their ongoing support of the University of California reflected in this budget. As the state continues to deal with a difficult financial environment, we share a fundamental belief with California leaders that our university is an engine for social and economic mobility, scientific and medical discovery, and patient care that serves every California community. 

The 7% increase from the state goes a long way toward fulfilling the compact and providing the funding necessary to educate and invest in our students. 

__________________________________

Translation: "Goes a long way toward fulfilling the compact" = Less than the "compact" promised.

__________________________________

This is especially important given the sustained attacks against UC and funding cuts by the federal government over the past 18 months. I want to specifically acknowledge and thank Governor Newsom for his unwavering support for the university throughout his tenure. His final budget again demonstrates his belief in the value of public higher education in California and in our hundreds of thousands of students, faculty, and staff.

Source: https://www.universityofcalifornia.edu/press-room/uc-statement-2026-27-final-state-budget.

Pleased with Bond

UC President James B. Milliken statement on the Veterans and Affordable Housing Bond Act of 2026

June 26, 2026

“For many students and families, the challenge of attending college goes far beyond tuition and fees. It lies in the broader costs of attendance, of which housing is central. I’m grateful to the state Legislature for including housing for UC students in the affordable housing bond and to Governor Newsom for signing the legislation so Californians have a chance to vote for it on the November ballot. It’s a vital step we can take to support our students and all Californians.”

Source: https://www.universityofcalifornia.edu/press-room/uc-president-james-b-milliken-statement-veterans-and-affordable-housing-bond-act-2026.

Now there is a deal

When we last posted about the status of state budget negotiations (yesterday), there was no final deal. But now there is, according to the governor:

https://www.gov.ca.gov/2026/06/26/finalbudget/.

You can read the news release at the link above. However, until we have actual numbers (which may take some time), don't take the flowery description literally.

No Deal (yet)

The legislature passed something called a "budget" in time to meet the constitutional deadline. But, as blog readers will know, it isn't really final. Negotiations between legislative Democrats - Republicans play no role in the Dem-dominated legislature - and the governor are still ongoing.

Jason Sisney of LAO reports on his blog that there is as yet no deal. He also reports a deal is likely by June 29 in time for much of the actual budget to be passed before July 1, the start of the new fiscal year, although some clean-up legislation will follow over the summer.

"Budget" passed by deadline

As we noted yesterday, June 15 was the (midnight) budget deadline for the legislature to pass a "budget." And it did so. However, as we also noted, the budget that was passed isn't the final version. Talks continue with the governor, with the primary sticking points involving spending on health care issues (and not about higher education or UC). Meanwhile, the governor's attention is being diverted by an investigation by the feds which he forcefully argues is politically motivated. However, there is just enough stuff about his wife's nonprofit activities to open the door to more revelations. The governor yesterday released a kind of preemptive Checkers speech (Google It!) in which he demanded that the feds leave his wife and kids out of it.*

In short, there is likely to be more drama in Sacramento, budget and nonbudget, but with little ultimate effect on next year's UC budget.

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*The speech may be seen at:

https://ia601802.us.archive.org/14/items/newsom-may-june-2026/newsom%206-15-2026%20FBI%20investigation.mp4. 

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More information on the budget negotiations is at:

https://www.sacbee.com/news/politics-government/capitol-alert/article316141655.html.

The midnight state budget deadline approaches

To meet the constitutional deadline, the legislature has until midnight tonight to pass a "budget." The Senate version of what is currently under consideration can be found at the link below:

https://sbud.senate.ca.gov/system/files/2026-06/legislatures-version-of-the-budget-summary.pdf

You will note, if you go to that link, that the higher ed proposals deal with the community colleges for the most part, not with UC.

The Assembly version has more detail. See:

https://abgt.assembly.ca.gov/system/files/2026-06/floor-report-of-the-2026-27-budget-june-11-2026.pdf

Below is the summary for UC:

===

University of California

• Provides $254.3 million ongoing General Fund for the fifth and final year of the Governor’s Compact funding of the UC. Also includes $96.3 million for partial funding of the fourth year, as expected based on the 2025 budget agreement.

• Extends the repayment of a one-time 3 percent funding reduction of $129.7 million included in the 2025 budget by one year from 2026-27 until 2027-28.

• Maintains a 2025 Budget Act agreement to defer the 2025-26 compact’s $240.8 million ongoing General Fund to support a 5% base increase until 2027-28. As part of the deferral arrangement, the state would plan to provide UC with one-time back payments in 2026-27 and 2027-28.

• Maintains a 2024-25 Budget Act agreement to defer $31 million ongoing General Fund to continue the 5-year program to replace nonresident students with California students at the Berkeley, Los Angeles and San Diego campuses until 2027-28.

• Provides $1.5 million General Fund to support the First Star Academy Youth Cohorts at UC campuses, as proposed in the May Revision.

• Includes $9 million one-time to continue the Cal-Bridge program.

• Adds $750,000 one-time for the ENLACE program.

• Provides $3.4 million one-time for the University of California Menopause Centers of Excellence.

• Includes $5 million one-time for the UCLA Center for Reproductive Health, Law, and Policy.

• Adds $3.6 million one-time to expand Prime RX program at UC San Diego.

• Appropriates $1.8 million one-time to UC Berkeley for the ACCESS optometry program.

• Includes $3 million one-time to UC San Diego for a workforce development initiative.

• Adds $6.5 million one-time to UC for the Voting Right’s Program.

• Provides $6.5 million one-time to UCLA for the Ralph J. Bunche Center

===

In essence, various pet programs are listed for additional funding. Various deferrals continue. As noted in prior postings, even if a budget is passed, revisions are possible as the Democratic legislative leaders continue to negotiate with the governor.

This too shall pass...

In order for the Legislature to pass a "budget" by June 15 - the constitutional deadline, it actually had to have something available to pass yesterday, June 12, to meet legislative rules. Something was made available which you can find at:

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202520260AB109.

If you go to the above link, you will find endless language appropriating funds for various purposes. To see the UC portion, search for "6440-001-0001" and keep scrolling down. (There are also scattered other references to UC elsewhere in the budget.) Once the legislature has passed the budget bill - probably along with associated "trailer bills" that relate to the budget, it has done its constitutional duty. The governor, however, could in principle remove items using his line-item veto. But in today's world of one-party rule, it is more likely that further discussion will occur between the Democratic leaders and the governor with further adjustments to the budget forthcoming before July 1.

Still Ahead

The latest cash report from the state controller for May 2026 (11/12ths of the current fiscal year), shows receipts modestly ahead of projections made at the time the governor's May Revision was presented. They are way ahead of the projections made almost a year ago when the current state budget was adopted, well over $25 billion ahead. The income tax is mainly the source of the overage, presumably due to capital gains on AI-related stocks.

All of this news is background to the ongoing legislative efforts to pass a budget. Because of various rules regarding legislation enactment, the legislature needs to adopt something called a budget today to meet the constitutional requirement of enacting a budget by June 15.

You can find the last cash report at:

https://www.sco.ca.gov/Files-ARD/CASH/May2026StatementofGeneralFundCashReceiptsandDisbursements.pdf.

Coming soon to a campus near you?

San Jose State University has rolled out an AI initiative as part of a larger CSU experiment. Pay attention! If you think it can't happen at UC, think again. (Yours truly, who on recall taught his last class in 2022, is amazed at how prescient his timing was!)

It can.

From the NY Times: Last spring, newly admitted students to San Jose State University received an unusual video message from the institution’s president, Cynthia Teniente-Matson. Her caramel curls were tucked behind her shoulders, her hands clasped neatly at her torso. Dressed down in a royal blue hoodie, she appeared composed and approachable. “Congratulations on your admission,” she said. “At S.J.S.U., you’ll have opportunities to dive into the technologies shaping the world today, and redefine what’s possible for tomorrow.” This was not, in fact, Teniente-Matson addressing the new class, but her brand-new custom A.I. avatar. “I’m thrilled to share this special moment with you,” the avatar said. “It’s only fitting, isn’t it? After all, technology is a cornerstone of what makes San Jose State University such an incredible place to learn, innovate and grow.”

...Because the world’s largest tech firms are headquartered in California, the state has generally become a petri dish for A.I. experiments in education. In early August, Gov. Gavin Newsom signed education agreements with Nvidia, Adobe, Google, IBM and Microsoft; each company agreed to provide free A.I. resources to California schools. The goal is to create the “A.I. work force of the future” by training high school, community college and C.S.U. students to use the technology. In this spirit, C.S.U.’s A.I. Initiative has been marketed as simple progress — a way to ensure that the state’s working-class students are buoyed by the A.I. economy rather than left behind. After all, many students in the C.S.U. system are first-generation immigrants or the first in their families to go to college; roughly half identify as Hispanic, and many commute to campus and work alongside their studies. With A.I.’s looming reorganization of the job market, many of these students might graduate into jobs that will no longer exist in five years. Already, recent reports estimate that roughly 40 percent of recent college graduates nationwide are underemployed.

C.S.U. is promising that the A.I. Initiative will prepare its students to be workers of the future. The only issue is that, at this moment of technological acceleration and flux, we don’t yet know what the workplace of the future will look like. A year into this experiment, no one can tell how it will end. Will these graduates be ahead of the curve in the new A.I. economy, or robbed of a chance to hone their critical thinking skills? If adopting A.I. eases their entry into the work force, might it also hinder their intellectual development in unforeseen ways?

...Students...  are caught in the middle as everyone around them struggles to figure out what becoming “the first A.I.-powered university” actually means. “Faculty are feeling anxious,” Nik Janos, a sociology professor at Chico State, told me. “Students don’t know how to behave. What are we doing here?”

...Today, economic pressures have prompted C.S.U. to redefine what it means to train useful workers. In December 2024, [Governor] Newsom’s office encouraged the C.S.U. system to create the A.I. Workforce Acceleration Board, which would “guide the equitable development of a highly skilled, diverse work force that can drive California’s A.I.-powered economy.” In January, C.S.U. signed the contract with OpenAI, and C.S.U.’s chancellor, Mildred García, announced both developments as flagship elements of the A.I. Initiative at a news conference shortly afterward. In April, Newsom released a new Master Plan for Career Education, a revision of [former UC President Clark] Kerr’s [Master Plan] model that responds to “rapidly changing work force needs, particularly with the advent of artificial intelligence.” The statewide push to incorporate A.I. into every level of education is an integral part of this plan...

...Faculty members I spoke with opted for different metaphors to describe the effect of A.I. on higher education, and their varied analogies captured the range of sentiments on campus. John Sullins, a computer ethics professor, likened it to handing every student a machine gun, while Niel Shahrasbi, an information systems professor, compared it to giving them a magic wand. Robert Ovetz, a lecturer in political science at S.J.S.U., told me he views A.I. as “an ‘intelligent’ steam shovel” that students are being trained to use. Jeremy Murray, a historian at Cal State San Bernardino, described the integration of A.I. as a “smash and grab situation” akin to a bank robbery.

...The A.I. Initiative is a potentially lucrative ticket to a job in the tech industry and the class mobility it brings. But many of their peers instead perceived it as a threat not only to their education, but also to the kinds of jobs they had arrived at S.F.S.U. hoping to pursue. Vi Lee, a political science and Asian American studies double major, helped organize a student union protest demanding that the contract with OpenAI not be renewed “until students and faculty have control over A.I. policies and funding on campus.” 

...CSU’s A.I. Initiative has set off an institutional identity crisis: The debate about A.I. on campus is also a debate about exactly what public education in California is for. What does it mean to train the next generation of Californian workers and citizens when neither students nor faculty nor administrators have a solid grasp on what that requires, or what the “A.I. economy” will be in even four years...

Full story at https://www.nytimes.com/2026/06/01/magazine/ai-university-college-california.html.

And then again, there is this:

Or direct to https://www.youtube.com/watch?v=pNaN0iAuan8.

The Budget Process

After having received the governor's May Revise budget proposal for 2026-27, the two houses of the legislature have been formulating their own versions. Under the state constitution, the legislature must pass a budget by June 15 or be penalized. But it is left to the legislature to define what a "budget" is, thanks to court decisions. So it is possible for discussions with the governor to continue after that date, if the legislature passes something labeled a budget. 

Because Democrats dominate the legislature, it is essentially Democrats that matter in the process. Senate Democrats have produced a budget document that is mainly a shopping list of proposals without a complete tabular presentation. It appears from the document that reserves will be falling under their plan (i.e., the budget is in deficit). 

The higher ed portion doesn't mention UC and mainly concerns adjustments for community colleges. It does contain an increase in the Middle Class Scholarship program which has some benefit for UC indirectly. You can find the Senate Democrats' document at:

https://sbud.senate.ca.gov/system/files/2026-05/may-28-2026-foundation-for-the-future-senate-version-of-the-budget_0.pdf.

In theory, the legislature could pass a budget and the governor could veto it. That is not going to happen. The governor could use his line-item veto to trim some elements. However, what is more likely to occur is that the two houses and the governor will get together, reconcile differences, and then enact a budget, even if the actual process extends beyond June 15.