“Newsom’s finger-pointing on the budget shortfall is the biggest load of crap I’ve ever seen from a politician, and he shovels out a lot of it,” said Assembly Republican Leader Gallagher.
It’s been a big week in Sacramento. Between legislators, lobbyists, pundits, and politicos, the talk of the town is the California May Budget Revision. Released by the Governor’s Office by May 14th of each year, the proposal revises the governor’s initial budget proposal—submitted in January—to incorporate the latest economic data and revenue projections, which often involves changes to spending plans and policy initiatives.
This year, discussion of the Revision surrounds around Governor Gavin Newsom’s announcement last week that California faces an astonishing $12 billion budget shortfall. And, for additional context, just several years ago, the Golden State enjoyed a budget surplus of around $100 billion. Naturally, it’s led many to wonder what has caused such a dramatic reversal in California’s financial position in such a short time.
If you ask the Governor, he would lay the blame squarely at President Donald Trump and the implementation of tariffs on foreign goods—policies which were not in effect when the first iteration of the budget was submitted towards the start of the year. That draft wrongly projected that the state would enjoy a budgetary surplus. Rightly or wrongly, Democrats have dubbed the phenomenon the “Trump Slump.”
“California’s fundamental values don’t change just because the federal winds have shifted,” Newsom said in a statement. “Even as the ‘Trump Slump’ slows the economy and hits our revenues, we’re delivering bold proposals to build more housing, lower costs for working families, and invest in our kids.”
What the progenitors of the “Trump Slump” claim fail to acknowledge is that most states in the union are currently experiencing surpluses even after the tariff rollout. California is therefore incongruous with national trends, and the blanket condemnations of President Trump feel deliberately lacking in context. While it stands to reason that California would be hit harder than most states given its proximity to Asian-Pacific markets and its reliance on international freight and shipping industries, it can just as easily be argued that California has less of a revenue from and more of a spending problem—and, evidently, even Newsom agrees.
Thus, the Governor has proposed the state halt healthcare benefits for undocumented migrants—or, as they are more verbosely described by the state, individuals with “unsatisfactory immigration status.” When previously asked if he would consider this course of action earlier in year in light of a $6.2 billion Medicaid revenue gap, Newsom said it was “not on [his] docket.”
And so, Newsom’s allies feel as though a promise has been forsaken.
“Newsom’s proposals go against the commitment the state has made to the immigrant community,” argued California Immigrant Policy Center Executive Director Masih Fouladi. “Questions about the practicality of the program aren’t even something that we want to entertain with. The proposal just doesn’t match with our values as a state.”
Under the newest proposal, low-income undocumented immigrants residing in California will no longer be eligible to receive Medi-Cal starting next year while though those currently enrolled will not lose their benefits. And by charging adults with “unsatisfactory immigration status” a $100 premium every month for the benefits that they receive, Newsom hopes the move will save the state $5.4 billion by as early as 2028.
Not if California Democrats can help it.
“Congress may be walking away from its obligation to the poor, the elderly, and the disabled, but California will not,” said State Senator Dave Cortese.
Governor Newsom’s plan will also result in a substantial budget cut for Planned Parenthood—an organization which famously bankrolls the campaigns of innumerable Democrat candidates throughout the state. Jodi Hicks, President and CEO of Planned Parenthood Affiliates of California, called the move “cruel, quite frankly, especially during this time that we’re fighting at the federal level as well.”
Additionally, Newsom has proposed eliminating state health care coverage of certain weight loss drugs, which could potentially save the state’s economy an estimated $680 million in the next three years. Early education programs as well as those protecting the environment are also expected to face decreases in funding.
One wonders if moves such as these are part of Newsom’s plan to increase his appeal with Republicans ahead of a heavily anticipated bid for President in 2028. The move is surely upsetting his allies on the Left, but it doesn’t seem to be winning any favor with Republicans either.
“Newsom’s finger-pointing on the budget shortfall is the biggest load of crap I’ve ever seen from a politician, and he shovels out a lot of it,” said Assembly Republican Leader James Gallagher. “We’re in this mess because of his reckless spending, false promises, and failed leadership.”
It’s clear that Newsom wants to leave his mark on both California and U.S. politics—but only time will tell if he is remembered as a great uniter or as a textbook definition of the dangers of proverbial fence-sitting. When one tries to appease both sides of the aisle, they risk alienating both. One cannot have their cake and eat it too.
But—far more importantly than Newsom’s political legacy—there is a very real deficit that all Californians must now face. As more and more middle class households leave as part of the ongoing Golden State exodus, the pool of taxpayers footing the bill for such financial mismanagement grows ever smaller. This is the fallout of political posturing, and no mention of Trump or any other political adversary—legitimate or otherwise—changes that reality.
