SACRAMENTO, CA — Following this morning’s release of Governor Newsom’s 2025-26 revised budget proposal, the California Budget & Policy Center (Budget Center), a nonpartisan research and analysis nonprofit, responded with the following statement from its executive director, Chris Hoene:
“The state budget should reflect the values of California’s people, who remain committed to supporting our state’s most vulnerable, including immigrants and people with low incomes. Californians expect state leaders to advance a vision that sharply contrasts with the harmful federal agenda, not cuts that target marginalized communities and deepen inequality.
“The 2025–26 budget proposal fails to marshal the resources needed to help vulnerable Californians meet basic needs like health care, housing, and food assistance. It also falls short in delivering the bold response needed from California’s leaders amid unprecedented federal threats and economic uncertainty.
“Before considering major cuts to Medi-Cal and In-Home Supportive Services — funding that supports the health and well-being of Californians with low incomes — state leaders must scrutinize the costly ‘shadow budget’ of tax breaks. Many of these tax breaks cost the state billions of dollars per year and largely benefit the wealthy and profitable corporations. These are the same interests poised to gain from proposed federal tax cuts, which come at the expense of children, families, and people with disabilities across the country.
“While the state’s fiscal reality will necessitate some targeted spending reductions, policymakers have options to avoid harming vulnerable Californians. We urge the Legislature to reject the governor’s austerity measures that target the health and well-being of Californians and instead pursue meaningful revenue solutions to help close the shortfall today, buffer against federal cuts, and chart a better future where every Californian has access to health care, housing, child care, and other basic needs.
“Slashing Medi-Cal funding and increasing barriers for undocumented Californians, who pay $8.5 billion in state and local taxes each year, to access basic health care is a shortsighted measure that could lead to people losing access to health care, higher health care costs, and an overreliance on emergency room services. The governor’s proposal also puts the health and well-being of seniors and people with disabilities at risk by reinstating the asset limit and proposing several other cuts.
“The governor’s proposal to draw from the state’s robust reserves rightfully aids in closing the shortfall and helps mitigate harm. Yet the state can afford to further draw from the state’s $15.7 billion in reserves to prevent one-time cuts to basic services that support basic needs.
“We applaud the governor’s steadfast commitment to CalWORKs, community schools, maintaining subsidized child care spaces, and the proposal to close one additional state prison by October 2026.
“Despite the state’s fiscal challenges, the governor remains committed to wasting scarce resources on the film tax credit, a giveaway for film studios.
“We remain encouraged by the interest in addressing the interaction between Proposition 2 and the Gann Limit, which artificially constrains the state’s ability to save in times of prosperity and hinders the state’s ability to protect vulnerable Californians in times of deficits like today.
“As the world’s fourth-largest economy, California has the wealth and resources to reject a harmful, corporate-first agenda and instead build a state where everyone has the opportunity to succeed.”
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About the California Budget & Policy Center:
The California Budget & Policy Center (Budget Center) is a nonpartisan research and analysis nonprofit advancing public policies that expand opportunities and promote well-being for all Californians.
