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Monday, October 19, 2026Bay Area Market: Coverage updated daily

Newsom and legislators withhold school funds while state blows money on pork and luxury travel

While the state withheld $3.9 billion from schools, it spent $1.3 billion on pork projects and $600,000 on train consultants’ questionable luxury travel bills, reports say.

East Bay residential neighborhood, California
Curated News BriefBased on original reporting by CalMatters Housing (September 17, 2026). The summary below is the Journal’s; the local analysis is original commentary by Omar Murillo.

Look, I want to walk you through something that's been making waves in Sacramento, and it affects all of us in the Bay Area pretty directly. According to CalMatters Housing, the California Teachers Association just filed a lawsuit demanding that the state release nearly four billion dollars in school funding that Governor Newsom and the Legislature held back during this year's budget process. This money is supposed to be protected under Proposition 98, a constitutional requirement voters approved back in 1988 that makes state funding the backbone of our public school system.

Here's the context you need to understand. The state has been dealing with massive budget shortfalls for years now, and one strategy they've used is to temporarily set aside these school funds to help close the gaps. The union is also pointing out that there's another almost two billion dollars from last year that was similarly withheld, though that amount eventually gets repaid. The state's budget analyst has described this pattern as creating a "wall of debt" to manage years of multibillion-dollar deficits.

At the same time this lawsuit was announced, CalMatters reported on something else that caught people's attention. The Legislature had tucked away roughly one point three billion dollars in what amounts to pork barrel spending throughout the budget. We're talking about projects like twenty nine million for a gym renovation at a Santa Barbara college, thirteen million for a farmers market in wealthy Marin County where the governor lives, and three million for a baseball stadium. The reporting showed these projects were added quietly with little public discussion, and a lot of them benefited affluent communities while lower-income areas got passed over.

There's more to this picture. The High Speed Rail Authority, which is overseen by appointees of the governor, spent nearly six hundred thousand dollars on travel expenses that the inspector general flagged as questionable. We're talking trips to nightclubs, gyms, escape rooms, and cigar lounges that didn't seem related to actual state business. This is happening while a bullet train project that's already billions of dollars over budget continues to move forward.

What I'm seeing locally here in the Bay Area and Fremont is a real tension between what gets funded and what gets cut. When school districts are laying off teachers and cutting programs because of enrollment declines and budget pressures, and meanwhile the state is finding money for luxury spending and special projects tied to individual legislators' districts, families start asking tough questions about priorities. East Bay buyers and sellers, especially those with school-age kids, are watching this situation closely because education quality impacts property values and community stability. This lawsuit and the spending revelations paint a picture of state government making choices that don't always align with what working families need most.