US EditionDespite $12 Billion State Budget Shortfall, Newsom and California Dems Defer Major Spending Cuts
CALIFORNIA, JUN 27 – California's $321 billion budget avoids major cuts by using $13.5 billion from reserves and funds critical areas like education, health care, and public safety, officials said.
- 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.
15 Articles
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Cal Matters
A ‘poison pill’ in California’s budget deal ties state spending to construction
In summary A state budget is headed to Gov. Gavin Newsom for his signature, but it won’t take effect unless the Legislature makes changes to housing and infrastructure development rules that he has demanded. After days of confusion in which a deal with Gov. Gavin Newsom threatened to unravel over his demand to include new housing and infrastructure regulations, the California Legislature passed an updated state budget on Friday. With the start o…
The Desert Sun
Ventura County StarCalifornia budget breakdown: How it impacts your life, from Medi-Cal and education to fires
The state's fiscal year begins July 1. As California faces a shortfall in the billions, here's a look at what the budget proposes.
‘Poison pill’ in California’s budget deal ties state spending to construction
After days of confusion in which a deal with Gov. Gavin Newsom threatened to unravel over his demand to include new housing and infrastructure regulations, the California Legislature passed an updated state budget on Friday.
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