BAKERSFIELD, Calif. (KERO) — California Gov. Gavin Newsom says the state's budget deficit will be eliminated through 2028 under his revised spending plan for the 2026-27 fiscal year.
Newsom released the revised budget plan, which addresses a projected shortfall through a combination of Medicaid adjustments and prison reductions, among other changes. The full revised budget plan can be found on CA Department of Finance Budget website.
"A balanced budget in 26-27, and in 27-28, this is a two-year budget," Newsom said.
The governor's revised budget projects General Fund revenues to be $16.5 billion higher over the next three years compared to January's forecast — driven largely by a 2025 spike in stock market capital gains.
Over the course of his hour-long address and in the 105-page budget document, Newsom outlined several key proposals though two have been discussed in Kern County extensively over the last year.
Healthcare
On healthcare, Newsom announced additional state-level changes to Medi-Cal aimed at preventing a potential shortfall. These include reinstating the asset test for seniors — meaning those with too much in savings could lose coverage — and raising monthly premiums for undocumented adults ages 19 to 59 from $30 to $50. He also detailed other program refinements designed to save the state hundreds of millions of dollars.
Prisons
Newsom said the California Department of Corrections and Rehabilitation expects to save tens to hundreds of millions of dollars by streamlining some clerical processes. A declining prison population is prompting the closure of 4 prisons across the state.
Critics of the governor say the closure of these prisons and failures to fund efforts to enforce Prop 36 amount to turning his back on California residents.
A joint statement from the California District Attorneys Association, California State Sheriffs' Association, and Chief Probation Officers of California reads in part:
"Governor Newsom has again turned his back, denying communities across the state the resources they need to enforce the law and save lives."
A separate statement from the Chief Probation Officers of California reads in part: "“Pretrial programs have increasingly become the dumping ground for nearly every state court-ordered community release, yet the state continues to reduce the funding needed to safely monitor those cases. That is not sustainable."
Local and Statewide reaction
The city of Bakersfield and Kern County both said they are reviewing the revision and assessing any potential impacts, while several advocacy groups and unions lauded and chided the Governor's announcement via emails to 23ABC.
An email from CFT - Union of Educators and Classified Professionals advocates for Prop 98 to be fully funded.
"A better California starts in our classrooms. The investment we make in students today will define who we are as a state tomorrow. Prop. 98 is a promise to every student in this state – their education, their future, and their potential are worth fighting for, even in uncertain times," said Jeff Freitas, President of CFT - A Union of Educators and Classified Professionals. "While California's educators and classified professionals appreciate the Governor's proposed 4.31% COLA, we stand firm in our demand that Proposition 98 be fully funded."
Arnulfo De La Cruz, President of SEIU California and SEIU Local 2015 applauded the Governor's revised budget saying in part in an email:
“With Trump’s H.R. 1 cuts targeting health and food lifelines for millions of California families, SEIU members have led the fight to keep kids from going hungry and protect families from the devastating consequences of being shut out of health care. Our UnRig California campaign demands accountability from the corporations hauling down billions that Trump swiped from our safety net, and both branches of the Legislature as well as the Governor are listening and bringing real proposals to begin addressing this fundamental unfairness."
Max Arias, Child Care Providers United’s Chairperson and Chief Negotiator was disappointed to see a slashed cost-of-living adjustment for healthcare providers, saying in part: "Governor Newsom spent this morning talking about California's 'dominance' while pulling the rug out from under child care providers who keep working families afloat and are the backbone of California’s economy. The Governor’s proposal fails to ensure providers earn the true cost of care and slashes a COLA proposed in January that was already failing to keep pace with the actual cost of living and providing care."
“The May Revision abandons struggling families the same way the President and Congress did by passing H.R. 1,” said California State Associations of Counties CEO Graham Knaus. “It doubles down on the federal cuts, leaving more families without healthcare or food, weakening our economy, and ultimately walking away from the communities that need support the most. This does not reflect California values.”
“Health care is a fundamental human need, and this budget proposal recognizes the importance of coverage. To preserve access to care for California’s most vulnerable, additional resources are needed,” said Carmela Coyle, President & CEO of the California Hospital Association.
“The Governor’s own budget numbers make the case for prison closure,” said Amber-Rose Howard, Executive Director of Californians United for a Responsible Budget.
“Today’s May Revision reflects a stronger-than-expected revenue picture, but Californians should understand what this moment really means. The state brought in more revenue than projected and spent less than anticipated, yet our fiscal outlook remains heavily tied to the volatility of Wall Street and a relatively small group of high-income taxpayers. That reality has not changed. What has changed is transparency," CA State Controller Malia Cohen.
County Welfare Directors Association of California Executive Director Carlos Marquez III added: “We appreciate Governor Newsom’s gesture to the life-saving role of county eligibility workers in keeping people fed and healthy in today’s May Revise. However, today’s proposal leaves two-thirds of the additional workers on the table needed to combat the magnitude of our federally-provoked hunger and healthcare crisis. We call on the Governor and Legislature to be even bolder with ongoing and higher workforce investments that respond to the true scale of the threats we face due to H.R. 1.”
“While every step toward addressing the $100 BILLION cut to California’s healthcare helps, this $300 MILLION proposal is simply nowhere near enough to meet the scale of the crisis facing California working families,” said Debru Carthan, Executive Vice President of SEIU-United Healthcare Workers West,
A final budget is still months away. The enacted budget will not be voted on and signed into law until later this summer.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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