California's Healthcare Cuts Immigrants Pay the Price to Fix $12-Billion Deficit

California Closes $12-Billion Deficit with Healthcare Cuts and Strategic Reallocations

California Governor Gavin Newsom has signed a revised state budget, addressing a significant $12-billion deficit by making tough decisions across various sectors. The budget, passed by lawmakers following an agreement on a $321-billion spending plan, reflects a strategic approach to fiscal challenges, but not without impacting key progressive priorities.

This marks the third consecutive year that California, the nation's most populous state, has been compelled to curtail funding or halt programs championed by Democratic leaders, underscoring the persistent economic headwinds.

While the budget averts the most devastating cuts to essential safety net programs by leveraging state savings, borrowing from special funds, and delaying payments, it includes notable adjustments:

• Healthcare: Enrollment of new adult immigrants without legal status in the state-funded healthcare program (Medi-Cal) will cease starting in 2026. Additionally, a $30 monthly premium will be implemented in July 2027 for immigrants remaining on the program, including some with legal status, applicable to adults under 60.
• Mental Health: $78 million in funding for mental health phone lines is eliminated, impacting a program that served approximately 100,000 individuals annually.
• Dental Services: Funding to subsidize dental services for low-income individuals will be discontinued in 2026.
• Fertility Services: The implementation of legislation mandating health insurance coverage for fertility services is delayed by six months to 2026.

“It’s balanced, it maintains substantial reserves, and it’s focused on supporting Californians,” Newsom stated, acknowledging the difficult choices made.

Healthcare Adjustments: A Closer Look

The changes to Medi-Cal represent a scaled-back version of Newsom's original proposal, delivering a blow to the state's ambitious goal of universal healthcare. Democratic State Senator María Elena Durazo voiced strong opposition, calling the healthcare changes a "betrayal of immigrant communities."

However, lawmakers successfully pushed back against several proposed cuts, securing funding for in-home domestic and personal care services for low-income residents and Californians with disabilities, and preventing cuts to Planned Parenthood.

Environmental Initiatives

To bolster state firefighting efforts, lawmakers have agreed to tap $1 billion from the cap-and-trade program, a market-based system designed to reduce carbon emissions. While Newsom sought to reauthorize the program through 2045 with a guaranteed $1 billion annual allocation for the high-speed rail project, this commitment was not included in the budget.

The budget does include funding to help transition part-time firefighters into full-time positions and allocates $10 million to increase the daily wage for incarcerated firefighters.

Public Safety Measures

The budget allocates $80 million to implement a tough-on-crime initiative approved by voters last year. This includes:

• $50 million for counties to build more behavioral health beds.
• $15 million for probation officers for pretrial services.
• $20 million for courts to support increased caseloads.

However, advocates argue that this funding falls short of the estimated $400 million needed for the program's first year.

Other Key Priorities

The budget also includes a boost to Hollywood with an increase in the state's film tax credit from $330 million to $750 million annually. Furthermore, $10 million is allocated to support immigration legal services, including deportation defense.

Conversely, cities and counties will not receive new funding to address homelessness, a decision local leaders fear could result in the loss of thousands of shelter beds. Newsom's proposal to streamline a project creating a massive underground tunnel to reroute a significant portion of the state's water supply was also not addressed.

Looking Ahead

California faces ongoing challenges, including potential federal cuts to healthcare programs and broader economic uncertainty, which could necessitate even deeper cuts. Senate President Pro Tempore Mike McGuire emphasized that these decisions were made without imposing new taxes on everyday Californians.

Republican lawmakers, excluded from budget negotiations, criticized the Democrats' approach, arguing that not enough was done to address future deficits. Senator Tony Strickland expressed concern about increasing borrowing, depleting the rainy day fund, and failing to reduce overall spending.

The 2024-25 California budget reflects the state's commitment to navigating fiscal challenges while balancing key priorities. While some tough decisions were made, particularly regarding healthcare access for immigrants, the budget aims to maintain essential services and support Californians through a period of economic uncertainty, setting the stage for future financial planning and strategic investments.

Tags: California budget, Gavin Newsom, State deficit, Healthcare cuts, Immigrant aid, Spending plan, Funding cuts, Housing bill, State savings, Budget agreement

Source: https://www.latimes.com/world-nation/story/2025-06-27/california-closes-12b-deficit-by-cutting-back-immigrants-access-to-health-care