California is faced with a budget deficit of additional $ 12 billion next year, a deficit widely caused by excessive spending and that Governor Gavin Newsom was aggravated by the federal prices of President Trump.
“California is in fact in fact,” said Newsom. “The United States of America, in many ways, are assured because we have a president who has been reckless.”
Newsom unveiled the forecasts during a presentation Wednesday of its revised expense plan of $ 321.9 billion which offers to recover free health care for low-income undocumented immigrants, eliminate media-cals advantages for expensive weight loss treatments and reduce overtime for home support workers, between dozens of other fillings.
The new deficit is added to 27.3 billion dollars in budgetary appeals, including $ 16.1 billion in discounts and a withdrawal of $ 7.1 billion from the State rainfall fund, which legislators and the governor have already agreed to do in 2025-26.
The global deficit of $ 39 billion marks the third consecutive year that Newsom and legislators have been forced to reduce the financing of state programs after having devoted more money than California to spend.
The proposed cuts of Newsom
Among the new cuts, the news on the table on Wednesday is a call to reduce its signature policy to provide free health coverage to undocumented immigrants eligible for income.
Newsom offers the freezing of the new Medi-Cal registration for undocumented adult immigrants on January 1 and forcing people over 18 to pay monthly bonuses of $ 100 to receive health coverage via Medi-Cal.
The share of costs will reduce the financial burden of the state and could reduce the total number of people registered in the health program if some immigrants could not afford the new premiums. Gel registrations can prevent the price of the program from continuing the ball after more people have covered than the state had provided it.
Changes offer minor savings of $ 116.5 million next year, with savings reaching $ 5.4 billion in 2028-2029.
The Governor also follows the example of the federal government and reduces $ 85 million in ozempic medicines and other popular weight loss drugs from all Medi-Cal coverage plans, while saving $ 333.3 million by eliminating long-term care services for certain registrants.
Newsom wants to cap overtime for workers in home support services, according to its budget, to save $ 707.5 million next year.
The Governor’s budget includes a controversial proposal to make $ 1.3 billion in funding in 2025-2010 from proposal 35, a measure of approved voters in November which dedicated the income of a tax on care organizations managed in order to pay mainly increases in media-cal providers’ rates. The decision should take a step back from a coalition of doctors, clinics, hospitals and other health care groups that supported the proposal, which almost 68% of voters have argued.
Under another cost reduction measure, the governor wishes to move $ 1.5 billion in funding for Cal Fire from the general fund. Instead, Newsom wants to provide this $ 1.5 billion in the greenhouse gas reduction fund paid by the product of the state ceiling and exchange program next year.
The Governor’s budget proposes to extend the ceiling and exchange program – a primary initiative of its kind which sets limits to the greenhouse gas emissions from companies and allows them to buy additional state auction, and it wishes to devote at least 1 billion dollars each year at high speed train.
Expenditure deficit
The budget marks a continuation of years of excessive spending in California as part of the Newsom administration.
After predicting a high surplus of $ 100 billion in the funding of the Federal Relaunch of COVID-19 and the economic gains that resulted three years ago, the Democrats did not reduce the expenses to correspond to a return to normal after the pandemic.
Bad projections, the cost of the hot air balloon of democratic policy promises and a reluctance to make long -term sweeping discounts added to the deficit at a time when the governor regularly praises the place of California as the fourth economy in the world.
State revenues have exceeded expectations since April, but state expenditure too.
Despite the deficit, California has more money to spend than in the previous budget approved in June, and the governor and legislators still plan to take $ 7.1 billion from the state rainfall fund to cover the total deficit of 2025-26.
A “Trump crisis”
Although the income tax revenues of individuals and corporate corporate tax have exceeded the projections of $ 6.8 billion until April, Newsom provides that overall income will be $ 16 billion lower than what they could have been from January 2025 to June 2026 due to the economic impact of Trump tariffs.
The governor initially published the new information, which his team nicknamed the “Flump Trump”, on the eve of the presentation of his state budgetary plan revised in 2025-26, seeking to blame the president for the expected income deficit of California.
Trump has implemented a series of prices on all imported products, higher taxes on the products of the goods of Mexico, Canada and China, and specific samples from products and materials such as cars and aluminum in April. The president fell from some of his prices, but Newsom alleges that policies and economic uncertainty will lead to higher unemployment, inflation, downward projections of GDP and capital gains income for California.
California put legal action last month by arguing that Trump does not have the power to impose prices on itself. On Tuesday, the State said that it would request a preliminary injunction to freeze the prices before the Federal Court.
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