For Capital & Main from Los Angeles—With a $44.9 billion revenue shortfall anticipated for the next fiscal year, Gov. Gavin Newsom has indicated he’ll institute budget cuts that advocates say will severely affect the poorest Californians and hamper the state’s efforts to address its homeless and affordable housing crises. 

At the same time, he is holding fast to his plan to expand Medi-Cal coverage to more Californians, a major goal for his administration. 

Capital & Main identified three critical areas slated for substantial budget cuts, which will directly affect vulnerable Californians. They include programs to build more affordable housing and address homelessness, as well as the California Work Opportunities and Responsibility to Kids program, or CalWorks, which provides short-term cash assistance and services to low-income families. The governor is also looking at delaying a planned minimum wage increase for 400,000 health care employees who work in hospitals and clinics that rely on state funding. The expansion of the Medi-Cal program to cover all undocumented Californians is likely to remain in the budget.

The proposed cuts to welfare programs are tough decisions for the governor’s office, said Lee E. Ohanian, distinguished professor of economics at the University of California, Los Angeles. “The state is in real fiscal trouble,” he said. Last time the state was in a big budget deficit was around 15 years ago, he said. 

In January, Newsom shared his budget proposal for the upcoming fiscal year. Last week, the governor refined his budget outlook to account for updated revenue and expenditure estimates. The state Legislature is expected to approve a budget for the state by June 15, and Newsom must sign off on it before July 1, when California’s new fiscal year begins.

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