Sacramento – California Gov. Gavin Newsom signed a budget Friday to close the $12 billion deficit, including a groundbreaking healthcare expansion for low-income adult immigrants without legal status.

For the third year in a row, the country’s most populous states have been forced to cut funds and stop some of the programs supported by Democratic leaders. Lawmakers passed the budget earlier that day after an agreement between Newsom and the Democratic leadership on a $32.1 billion spending plan.

But if lawmakers don’t send him the law by Monday to make it easier to build the home, the entire budget will be void.

The budget avoids some of the most devastating cuts to key safety net programs, state leaders said. They relied primarily on using state savings, borrowing from special funds and delaying payments to insert budget holes.

“It’s well-balanced, maintains substantial reserves and focuses on supporting Californians,” Newsom said in a budget statement.

California also faces a wide range of economic uncertainties that could force potential federal cuts to its health care programs and deeper cuts. Newsom in May estimates that federal government policies on tariffs and immigration enforcement could cut state tax revenue by $16 billion.

“We had to make some tough decisions,” Senate Speaker Mike McGuire said Friday. “We know we’re not going to please everyone, but we’re doing this to everyday Californians without new taxes.”

Republican lawmakers said they have been excluded from budget negotiations. They also criticized Democrats for not doing enough to deal with future deficits that could range from $17 billion to $24 billion a year.

“We’re increasing borrowing, we’re not taking away the fund on rainy days and reducing spending,” said Republican state Sen. Tony Strickland before the vote. “And this budget doesn’t do anything about affordable prices in California either.”

Let’s look at spending in key areas.

health care

Under the budget transaction, California will suspend enrollment of new adult patients who have no legal status in state-funded healthcare programs for low-income earners starting in 2026. Insurance premiums apply to adults under the age of 60.

The program change, known as Medi-Cal, is the scaling back version of Newsom’s proposal for May. Still, it’s a major blow to the ambitious program launched last year to help the state get closer to universal healthcare goals.

Democrat state Sen. Maria Elena Durazo voted “No” about her party and her broken healthcare change, calling it a betrayal of the immigrant community.

The transaction also removes $78 million in funding for mental health telephone lines, including a program that serves 100,000 people a year. It will help low-income dental services payments in 2026 and eliminate funds to delay the implementation of the laws required for health insurance to cover fertility services by six months.

However, lawmakers also successfully pushed back several proposed cuts from newspapers called “Draconian.”

The transaction secures funding for programs that provide domestic and personal care services to some low-income residents and Californians with disabilities. It also avoids reducing Planned Parenthood.

environment

Lawmakers agreed that the state will tap $1 billion from the Cap-and-Trade program to fund the state’s firefighting efforts. The Cap-and-Trade Program is a market-based system aimed at reducing carbon emissions. Companies need to buy credits due to pollution, and the money goes to the fund, and lawmakers are supposed to tap for climate-related spending.

Newsom wanted to reapprove the program until 2045. This ensured that $1 billion would go to the state’s long-standing high-speed rail project every year. The budget doesn’t make that commitment because lawmakers wanted to spend plans outside of the budget process. The railway project currently receives 25% of its cap-and-trade revenue. This is about $1 billion a year depending on the year.

Legislative leaders have also approved funds to help part-time firefighters move into full-time positions. While many state firefighters only work nine months each year, lawmakers said they are harming the state’s ability to prevent wildfires and fight them. The deal includes $10 million to raise the daily wages of incarcerated firefighters who currently earn between $5.80 and $10.24 a day.

Public Safety

The budget agreement provides $80 million to help voters implement the tough crime initiative that was overwhelmingly approved last year. The measure will make shoplifting a felony for repeated offenders, increase penalties for some drug claims, and give judges the power to order treatment for people with multiple drug charges.

Most of the fund, $50 million, helps the county build more behavioural health groups. The probation officer wins $15 million for pretrial services, and the court receives $20 million to support the increased caseload.

Supporters of the measure, including sheriffs, district attorneys and probation officers, said that wasn’t enough. Some are estimated to cost around $400 million in the first year of the program.

Other priorities

Newsom and lawmakers have agreed to raise the state’s film tax credit from $330 million to $750 million a year to boost Hollywood. Newsom’s priorities, the program begins this year and expires in 2030.

The budget provides $10 million to support immigration legal services, including deportation defense.

But cities and counties won’t see new funds that will help address homelessness next year. Local leaders said it could lead to the loss of thousands of shelter beds.

The budget also does not build on Newsom’s proposal to streamline projects that create large underground tunnels to reroute most of the state’s water supply.

nguyễn writes for the Associated Press.