Lawmakers say no to Newsom’s large social service spending cuts

By Yue Stella Yu, Jeanne Kuang and Mikhail ZinshteynCalMatters

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California legislative leaders introduced at present that they reached a price range proposal to handle the state’s $12 billion anticipated deficit, leaning closely on borrowing from different state funds to proceed offering social providers fairly than making the deep cuts Gov. Gavin Newsom proposed.

Whereas Newsom desires to slash well being care providers for low-income Californians, cut back funding to public universities and supply no funding to sort out homelessness, Democratic lawmakers proposed softer adjustments, at occasions rejecting the governor’s concepts altogether.

Newsom’s Might price range proposal got here amid a bleak fiscal outlook for Californiaone which legislators say they share. They blamed the fiscal turmoil on President Donald Trump’s tariff insurance policies, the state’s fast-growing Medi-Cal enrollment and the expensive Los Angeles wildfires.

However, legislative leaders argued, balancing the state’s price range mustn’t come on the expense of “California’s most vulnerable.”

“While we have made many tough but necessary decisions to achieve a balanced budget, we will never waver in our commitment to all Californians,” mentioned Senate President Professional Tem Mike McGuire and Meeting Speaker Robert Rivas, each Democrats, in a joint assertion.

The Legislature faces a June 15 deadline to move a price range invoice, although in recent times they’ve permitted “placeholder” laws and continued negotiations with Newsom  within the following weeks, as they’re anticipated to do that yr.

The legislative proposal depends on $7.8 billion in borrowing, $3.5 billion in cuts and $1 billion in shifting cash and deferring or delaying funds to shut the $12 billion gap. Lawmakers additionally need to overhaul California’s Wet Day Fund to permit the state to deposit more cash into reserves throughout years when the state is flush with money — an concept that might require voter approval.

One of the vital intensive cuts Newsom proposed was to the Medi-Cal system, which gives medical insurance to low-income residents. The protection was expanded final yr to incorporate poor people who find themselves dwelling within the nation illegally, driving up prices at the next price than anticipated and forcing the state to allocate more cash to this system in March.

Newsom proposed freezing new enrollment for immigrants who lacked authorized standing and charging present enrollees premiums to decrease the price. He additionally proposed chopping in-home take care of undocumented immigrants and restoring an asset check for some Medi-Cal enrollees, sparking outrage and protests amongst caregivers and advocates for low-income seniors and people with disabilities.

Legislators rejected lots of Newsom’s proposed cuts of their proposal, refusing to slash extra time hours for in-home caregivers — a proposal even Republicans opposed.

Newsom had proposed ending Medi-Cal protection for seniors who’ve greater than $2,000 in belongings, which might have reduce about 112,000 seniors from this system by mid-2027, Division of Well being Care Companies director Michelle Baass has mentioned. However lawmakers are proposing the next asset threshold of $130,000.

The prospect of steep social service cuts has been a tricky tablet to swallow for the Democratic supermajority concurrently the Republican-led Congress is pursuing its personal cuts to Medicaid and meals stamps. The influential legislative Latino Caucus strongly opposed chopping  well being protection for immigrants who entered the nation illegally. However whereas lawmakers privately floated different choices to rein in well being care spending, together with limiting providers fairly than blocking enrollment, they by no means coalesced round another.

Now, lawmakers seem able to again Newsom’s proposals to halt enrollment and cost month-to-month premiums for undocumented adults who’re coated by Medi-Cal — with some adjustments. These embrace reducing premiums from what Newsom needed, delaying chopping dental advantages for these immigrants and permitting immigrants who’re already coated to re-enroll inside six months in the event that they lose protection for not paying a premium.

Amanda McAllister-Wallner, government director of Well being Entry California, mentioned the Legislature’s price range primarily delays the cuts Newsom proposed and doesn’t embrace sufficient new options to protect well being care entry for immigrants and different low-income Californians.

“We’re really seeing the Legislature double down on the exact same solutions that were in the governor’s budget and continuing to balance this budget by making deep cuts to health care and deep cuts to services,” she mentioned.

However lawmakers need to reverse one other controversial reduce Newsom proposed: Funding to reproductive well being suppliers. In Might, the governor proposed shifting $500 million in tobacco-tax-funded {dollars} — cash that was purported to go towards providers together with ladies’s well being — into the state’s normal fund, a transfer condemned by Deliberate Parenthood as “cruel.” The legislative deal rejected the governor’s plan.

Housing, setting

Lawmakers additionally proposed new funding for public security and homelessness. The legislative deal features a one-time fund of $110 million for counties to implement Proposition 36the tough-on-crime proposal voters permitted final fall that features stricter sentences and mandated remedy applications for some drug and theft offenses. Republicans, some Democrats and native prosecutors had demanded the funding. Practically half cash proposed by lawmakers would go towards behavioral well being providers.

Legislators are proposing $500 million in funding to handle homelessness, after Newsom final month proposed no funding towards native governments as he slammed them for failing to handle the state’s ballooning homeless inhabitants. The quantity is half of what the state permitted final yr.

The legislative deal contains one other $500 million within the state’s Low Earnings Housing Tax Credit to fund inexpensive housing tasks, $300 million to assist first-time house consumers and $120 million to construct extra inexpensive rental housing.

Legislators additionally need to spend much less cash from the state’s local weather funds to pay for firefighting prices than Newsom.

Final month, Newsom proposed extending and tapping into the state’s landmark cap and commerce program — funded by main polluters — to fund the California high-speed rail challenge and canopy California’s firefighting prices, drawing fierce opposition from each Democrats and Republicans. The governor sought to make use of not less than $1.5 billion a yr to pay for fireplace prevention, rising to $1.9 billion in fiscal yr 2028-29.

Lawmakers agreed to allocate $1 billion from the local weather fund over the subsequent two years for that goal and assure no funding past subsequent yr.

Newsom had additionally proposed drawing $316 million from Proposition 4 funding – a $10 billion local weather bond measure voters permitted final yr – to backfill the state’s price range. Legislators proposed to decrease that quantity as an alternative to $142 million.

Lawmakers reject cuts to UC and CSU

The Legislature rejected Newsom’s proposal to chop base funding from the College of California and California State College, which collectively have greater than 750,000 college students. That is a pivot from final yr, when lawmakers agreed to chop state help for universities by 8% for the upcoming 25-26 price range yr. Within the wake of a large marketing campaign in opposition to the cuts, Newsom as an alternative proposed reductions of three% in Might, slightly below $300 million.

The Democratic lawmakers are in search of no cuts in any respect. And, with the governor’s plans to revive different funding that was reduce from the schools final yr, the techniques would see a mixed $200 million bump in state schooling spending.

In one other win for college kids, lawmakers need to halt a deliberate discount to the Center Class Scholarship, which provides tons of of hundreds of scholars a number of thousand {dollars} to pay for varsity. Final yr’s price range dropped funding to $527 million, however lawmakers at the moment are in search of to revive it to its earlier roughly $900 million in funding.

CalMatters well being reporter Kristen Hwang additionally contributed to this story.

This text was initially printed on CalMatters and was republished below the Artistic Commons Attribution-NonCommercial-NoDerivatives license.