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Newsom announces $12B deficit in revised California budget proposal

  • Governor Gavin Newsom announced a revised $322 billion California budget on May 14, 2025, addressing a $12 billion deficit in Sacramento.
  • Newsom attributed the shortfall to broad economic uncertainty, including volatile stock markets, federal tariff policies dubbed the 'Trump Slump,' and reduced tourism revenues.
  • His plan proposes freezing expansion of Medi-Cal enrollment for undocumented immigrants, charging a $100 monthly fee to current enrollees, closing a state prison by 2026, and redirecting $1.5 billion from a climate fund to fire response.
  • According to Newsom’s office, implementing the proposed adjustments is expected to reduce state expenses by about $5.4 billion over the next several years, while the expansion of Medi-Cal to undocumented immigrants resulted in $2.7 billion more in costs than anticipated in 2024.
  • The proposals now face legislative review, reflecting Newsom’s attempt to balance fiscal responsibility with the state’s commitments amid political and economic challenges.
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arcamax.com broke the news in on Wednesday, May 14, 2025.
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