SACRAMENTO, CA — Following Governor Newsom’s 2026-27 budget proposal released this morning, the California Budget & Policy Center (Budget Center), a nonpartisan research and analysis nonprofit, weighed in with the following statement from its executive director, Chris Hoene.
“California’s state budget is a reflection of our shared values and our responsibility to care for one another. Unfortunately, the governor’s 2026-27 spending plan balances the budget by dodging the harsh realities of the Republican megabill, H.R. 1, and maintains state cuts to vital public supports, like Medi-Cal, enacted as part of the current-year budget.
“Governor Newsom’s reluctance to propose meaningful revenue solutions to help blunt the harm of federal cuts undermines his posture to counter the Trump Administration. While the governor’s budget maintains and protects many current state programs, it leaves millions of Californians worse off as a result of federal cuts. The proposal will leave many Californians without food assistance and health care coverage.
“Californians are facing mounting affordability pressures alongside unprecedented federal harm, including brutal attacks on immigrant communities. The sweeping Republican megabill, H.R. 1, delivers massive tax giveaways to the wealthiest households and highly profitable corporations and increases funding for harmful immigration detention and deportation efforts, while slashing funding for Medi-Cal, CalFresh, and other essential supports that millions of families and low-wage workers rely on. The Legislature cannot allow the cruelty of the federal administration and the governor’s reluctance to act boldly to dictate our future — they must act decisively to protect communities, prevent additional harm, and invest in the well-being of all Californians.
“While California’s financial markets have remained resilient, the gains from that growth have not been shared equitably. Wealth and income inequality continue to widen in a K-shaped economy, with wealth increasingly concentrated at the top and corporate profits soaring, all while typical workers’ earnings barely keep pace with inflation.
“Yet, the governor’s proposal once again avoids scrutinizing the billions of dollars the state spends each year on tax breaks that disproportionately benefit large, profitable corporations and the wealthiest Californians and fails to consider meaningful tax solutions, like a progressive corporate tax, to address federal cuts and their impact on Californians.
“As the Legislature examines the governor’s proposal, they must ask why the state is not working to help backfill federal programs that vulnerable Californians rely on, while some of the world’s most profitable corporations — including, for example, Alphabet, Nvidia, and Apple — continue to benefit from billions of dollars in state subsidies. Closing costly and ineffective corporate tax loopholes is a common-sense step toward ensuring corporations that benefit from California’s workforce, infrastructure, and public investments contribute their fair share.
“As federal leaders continue to undermine health care, food assistance, child care, and support for immigrant communities, California must lead with an alternative vision rooted in people and justice. The 2026-27 state budget presents an opportunity to reject the federal administration’s vision for the country and invest boldly to secure an affordable and equitable future for Californians. The governor’s proposal does not outline such a vision.”
# # #
H.R. 1 and the Federal Budget and Its Impact on Californians:
Republican cuts to Medi-Cal could leave an estimated 3.4 million Californians without health coverage, and the state stands to lose $30 billion in federal funding each year. Republican cuts to SNAP are estimated to cost California between $1.7 billion and $3.7 billion annually in lost federal funding, putting more than 3 million households in the state at risk of losing some or all of their benefits. Taken together, the new federal tax provisions deliver more than 40% of the total tax cuts to the richest 5% of Americans, while the bottom receive 20% less than the top 1%.
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.
