California lawmakers reject hundreds of proposals amid $12 Billion budget deficit

Sacramento, California – Facing a worsening $12 billion budget shortfall, California lawmakers on Friday rejected hundreds of legislative proposals in a fast-paced, high-stakes hearing process known as the “suspense file.” Among the casualties: tax credits for parents of young children, a state-funded scientific research institute, and a plan to exempt tips from state income tax.

“This is not a year where we can be expanding programs or developing new offices and agencies,” said Assembly Appropriations Committee Chair Buffy Wicks (D-Oakland), as she opened the hearing. “Many good bills are going to fall by the wayside today.”

The Legislature’s suspense file hearings, held twice a year, allow lawmakers to weigh the costs of hundreds of bills and quietly cull expensive or controversial proposals. On Friday, the Assembly Appropriations Committee axed 35% of 666 bills, while the Senate committee rejected 29% of its 432-bill slate—more aggressive than last May’s trimming.

Senate Appropriations Chair Anna Caballero (D-Merced) emphasized the state’s difficult fiscal situation before departing quickly for a flight. “The state is facing a significant budget deficit, and with that in mind, the committee had to make difficult choices,” she said.

The cuts reflect the state’s ballooning health care spending and looming federal funding threats. Governor Gavin Newsom recently unveiled a $322 billion spending plan that includes major Medi-Cal cuts and a 3% reduction in public university funding.

Health-related proposals were hit hard. Wicks’ own bill to expand Medi-Cal to include housing services—a $40 million measure previously vetoed by Newsom—was killed, along with plans to expand home-based care and allow more immigrants to purchase plans through Covered California.

In the Senate, lawmakers shelved proposals to impose campaign finance limits on judicial and school board races, expand CARE Courts to include defendants with bipolar disorder, and address mountain lion encounters in rural areas. Two Republican-backed tough-on-crime bills—one blocking sex offenders from elderly parole, the other increasing fentanyl penalties—also died despite recent shifts in Democratic rhetoric.

Senate Minority Leader Brian Jones (R-San Diego) blasted the process as “anti-democratic,” accusing Democrats of silencing crime victims and public concerns.

Some measures were postponed for future consideration, including proposals to rein in ticket resale platforms and expand the state’s film tax credit to $750 million—a Newsom priority. Lawmakers removed the tax credit language for now, but Assemblymember Rick Zbur (D-Los Angeles) said the funding will likely be hashed out during budget talks.

Sen. Scott Wiener’s high-profile CEQA reform bill, aimed at streamlining housing development, advanced but will also face further negotiation in budget discussions.

With a mid-June deadline looming, lawmakers must now finalize a balanced budget while navigating competing priorities and a shrinking pool of resources.