SIMI VALLEY, CALIFORNIA - SEPTEMBER 27: California Gov. Gavin Newsom talks to reporters in the spin room following the FOX Business Republican Primary Debate at the Ronald Reagan Presidential Library on September 27, 2023 in Simi Valley, California. Seven presidential hopefuls squared off in the second Republican primary debate as former U.S. President Donald Trump, currently facing indictments in four locations, declined again to participate. (Photo by Mario Tama/Getty Images)
Sacramento, California – California lawmakers on Friday are poised to approve a budget that trims some of the state’s most high-profile progressive initiatives, including an expansion of health care for low-income undocumented immigrants, in an effort to close a projected $12 billion deficit. The $321 billion spending plan, crafted through negotiations between Democratic Governor Gavin Newsom and legislative leaders, is expected to win Newsom’s signature the same day. Still, the entire deal could unravel if lawmakers fail to finalize a separate agreement on housing policy by Monday.
For the third consecutive year, California — the country’s most populous state — has found itself scaling back or delaying ambitions central to its progressive identity. Under this year’s budget, the state will stop enrolling new adult patients without legal status in Medi-Cal, California’s low-income health care program, beginning in 2026. In addition, immigrants remaining in the program will be required to pay a $30 monthly premium starting in July 2027, a marked change from the original vision of near-universal coverage.
Newsom framed the trade-offs as a difficult but necessary step to keep California solvent in the face of what he described as hostile federal policy on tariffs and immigration enforcement. Democratic lawmakers echoed that message, pointing to a stubbornly uncertain economy and looming federal cuts that Newsom’s office estimated could drain $16 billion from state tax collections.
Republicans, however, blasted the budget as shortsighted. “We’re presenting this to the public as a balanced budget, and it’s only balanced because we’re borrowing money and we’re using reserves that are supposed to be for dire emergencies,” said Republican Senator Kelly Seyarto.
Beyond health care, other progressive priorities took a hit. The deal will eliminate $78 million in funding for mental health hotlines that served roughly 100,000 people annually, as well as funding for dental services for low-income Californians starting in 2026. A law requiring health insurance to cover fertility services will be delayed until 2026.
But lawmakers managed to shield some programs from deeper cuts, preserving funding for in-home care services for seniors and people with disabilities and avoiding reductions to Planned Parenthood.
Fire safety remained a focus, with lawmakers allowing $1 billion from the state’s cap-and-trade fund to bolster firefighting efforts, though they declined Newsom’s request to guarantee similar funding for the state’s long-delayed high-speed rail project. In a bid to strengthen wildfire readiness, the budget also funds the transition of 3,000 part-time firefighters to full-time roles, and increases pay for incarcerated firefighters.
Meanwhile, California’s homelessness crisis will receive no new state funding under this plan, alarming local officials who warn of the loss of shelter beds. And while Hollywood will see its tax credit more than double to $750 million a year through 2030, advocates for other critical services worry that, once again, the most vulnerable will be asked to bear the burden of hard times.
