California Budget Overview
- Governor Gavin Newsom signed a $321 billion budget to address a $12 billion deficit.
- This is the third consecutive year California cut funding for progressive priorities.
- The budget may become void if lawmakers do not pass legislation to facilitate housing construction by Monday.
Budget Adjustments
- The budget prevents major cuts to essential safety net programs.
- Funding gaps were addressed using state savings, borrowing from special funds, and delaying payments.
Health Care Changes
- Enrollment of new undocumented adult patients in state-funded health care will stop in 2026.
- Starting July 2027, $30 monthly premiums will apply to immigrants under 60 on the program, including some legal immigrants.
- The changes to Medi-Cal represent a significant reduction from Newsom's broader health care proposals.
- $78 million for mental health phone lines will be eliminated.
- Funding for dental services will be cut in 2026.
- Legislation requiring health insurance to cover fertility services will be delayed by six months to 2026.
- Funding for in-home care services and Planned Parenthood was preserved despite other cuts.
Environmental Funding
- The budget allows $1 billion from the cap-and-trade program for firefighting efforts.
- Newsom aimed to reauthorize the cap-and-trade program through 2045.
- Legislative leaders have deferred detailed spending plans outside the budget process.
- Funding is included to transition part-time firefighters to full-time positions and increase wages for incarcerated firefighters.
Public Safety Initiatives
- $80 million is allocated for implementing stricter crime policies approved by voters.
- Funding will support the construction of behavioral health beds and pre-trial services.
- Advocates argue that $80 million is insufficient to meet the program’s needs.
Other Budget Provisions
- Film tax credits will increase from $330 million to $750 million annually.
- $10 million is earmarked for immigration legal services, including deportation defense.
- Local governments will not receive new funding for homelessness services, risking the loss of shelter beds.
- The budget does not support plans for a major underground water supply tunnel.
Political Reactions
- Senate President Pro Tempore Mike McGuire acknowledged tough budget decisions while avoiding new taxes.
- Republicans expressed concerns over the exclusion from negotiations and criticized future deficit management.
- Democrat Maria Elena Durazo opposed the health care changes, citing betrayal to immigrant communities.
- Critics of the budget point to increased borrowing and a decline in spending reductions as potential issues.
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