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Newsom announces $12B deficit in revised California budget proposal

  • Governor Gavin Newsom announced a $12 billion deficit in California's revised budget for fiscal year 2025-26, released on May 14, 2025.
  • Newsom attributed the deficit primarily to economic uncertainty and a $16 billion revenue loss linked to President Trump's tariff policies and market volatility.
  • The $226 billion general-fund spending plan proposes freezing enrollment in state-funded health care for undocumented immigrants and cutting $85 million in weight-loss drug coverage starting 2026.
  • Governor Newsom described California as being "under assault" and emphasized that the state’s strategy was not intended to remove people from health programs. In response, James Gallagher, the Republican leader in the Assembly, dismissed Newsom’s attribution of budget problems to President Trump as entirely unfounded.
  • Cities in California are confronting significant budget gaps, with Los Angeles facing a shortfall close to $1 billion and San Diego encountering a $300 million deficit, highlighting the likelihood of statewide reductions in spending amid ongoing fiscal challenges.
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arcamax.com broke the news in on Wednesday, May 14, 2025.
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