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Despite $12 Billion State Budget Shortfall, Newsom and California Dems Defer Major Spending Cuts

  • California lawmakers passed a $321 billion state budget on June 28, 2025, with Gov. Gavin Newsom expected to sign it before July 1.
  • The budget negotiation reflected a $12 billion shortfall largely caused by federal tariff policies and required compromises on housing, Medi-Cal, and environmental reforms.
  • Key provisions include a freeze on new Medi-Cal enrollment for adult undocumented immigrants starting January 2026 and a $30 monthly Medi-Cal premium for most immigrants starting July 2027.
  • The budget provides $2.1 billion for Universal Transitional Kindergarten, $500 million for homelessness efforts, and $620 million in housing loans while deferring cap-and-trade program reauthorization.
  • The deal postpones major government cuts, relies heavily on reserves, and hinges on lawmakers passing urgent environmental quality act reforms by the July 1 deadline.
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The Desert Sun broke the news in Palm Springs, United States on Friday, June 27, 2025.
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