California Governor Signs $321 Billion Budget, Restricting Immigrant Healthcare Amid Fiscal Crisis
California Governor Signs $321 Billion Budget, Restricting Immigrant Healthcare Amid Fiscal Crisis
California Governor Gavin Newsom officially signed the state’s revised $321 billion budget on Friday, taking decisive action to close a $12 billion deficit. The move marks the third consecutive year the nation’s most populous state has scaled back progressive initiatives, notably a landmark healthcare expansion for low-income adult immigrants without legal status.
The budget, passed by lawmakers earlier the same day, relies heavily on state savings, borrowing from special funds, and delaying payments to avoid deeper cuts to essential safety net programs. Governor Newsom stated the budget is “balanced, it maintains substantial reserves, and it’s focused on supporting Californians.” However, the entire spending plan remains contingent on lawmakers passing legislation by Monday to streamline housing construction.
A significant and controversial provision of the new budget will halt new enrollments for adult patients without legal status in the state-funded Medi-Cal program starting in 2026. Additionally, a $30 monthly premium will be introduced in July 2027 for certain immigrants remaining on the program. This scaled-back version of Newsom’s initial proposal has drawn criticism, with some Democratic lawmakers, like State Senator María Elena Durazo, voting against it, calling it a “betrayal of immigrant communities.”
Beyond healthcare, the budget also includes cuts to mental health phone lines and delays funding for dental services. However, it preserves funding for in-home care services and avoids cuts to Planned Parenthood.
Key spending areas include allocating $1 billion from the cap-and-trade program for state firefighting efforts, approving funds to transition part-time firefighters to full-time roles, and increasing the daily wage for incarcerated firefighters. Public safety measures receive $80 million to implement a voter-approved initiative targeting shoplifting and drug offenses, though advocates argue more funding is needed.
Other notable provisions include a significant increase in the state’s film tax credit to $750 million annually and $10 million for immigration legal services. Conversely, cities and counties will not receive new funding for homelessness initiatives, and a proposed project to streamline the state’s water supply tunnel remains unaddressed. The budget reflects ongoing economic uncertainty and potential federal policy impacts that could further strain California’s finances.
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