Governor Gavin Newsom has proposed significant budget cuts targeting healthcare, public services, and media support to address California’s growing fiscal deficit.
On May 14, the governor’s office unveiled the proposed 2025-2026 state budget, outlining plans to cut $12 billion in spending. The plan focuses on areas that have traditionally received funding with minimal scrutiny, launching aggressive austerity measures to close the gap.
The total proposed budget is $321.895 billion. To balance the expected $12 billion deficit, Newsom’s plan includes broad spending cuts across multiple sectors. In addition to limiting Medi-Cal benefits for undocumented immigrants, the budget reduces $2.818 billion from legislative, judicial, and executive branch operations through workforce reductions and trimming additional expenses.
Business and Consumer Services Face Major Reductions
The business and consumer services sector is set to lose $3.426 billion in funding. This cut reflects the state’s conservative revenue forecast, which projects corporate tax revenues to fall to $35.613 billion, a $5.683 billion decrease from the previous year. Analysts attribute the decline to an overall economic slowdown and reduced exports.
A key factor is the $16 billion revenue shortfall linked to federal tariff policies under President Donald Trump. In response to criticism of unchecked spending, the governor’s office emphasized modest increases in funding for education, mental health services, and public safety.
Proposition 36 Enforcement Funding Shift Sparks Backlash
A controversial aspect of the budget is the absence of state funding for enforcing Proposition 36, which increases penalties for habitual theft offenders. Newsom stated that enforcement costs should be handled by county governments. This stance has drawn criticism from the California State Association of Counties, accusing the state of shirking its responsibilities. The issue is expected to face intense debate during legislative review.
Other Controversial Cuts and Investments
The budget also reduces funding for local journalism. Support for media organizations will be cut from $30 million over five years to $10 million. This reduction affects a joint initiative with Google aimed at supporting local news outlets through the News Innovation Fund, a program established in a 2023 agreement between the state and the company.
Meanwhile, the state plans to allocate an additional $1 billion annually to the high-speed rail project, pushing the total project cost beyond $100 billion. While the project receives federal funding, it continues to face scrutiny, including audits and oversight.
When Newsom introduced his first state budget in 2019, it totaled $208 billion. The current 2025 proposal reflects a more than 50% increase, now reaching $321.895 billion.
BY BRIAN CHOI [choi.inseong@koreadaily.com]
