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Newsom announces $12B deficit in revised California budget proposal

  • Governor Gavin Newsom announced a revised $322 billion California budget on May 14, 2025, revealing a $12 billion shortfall in Sacramento.
  • Newsom attributed the deficit to factors including President Trump's tariff policies, a volatile stock market, and declining revenues from tourism and wealthy taxpayers.
  • To address the gap, Newsom proposed measures such as freezing Medi-Cal enrollment for undocumented immigrants, charging enrolled undocumented recipients $100 monthly, cutting certain drug coverages, and closing a state prison by 2026.
  • Newsom's office estimates these reforms could save $5.4 billion by 2028-2029, while critics warn the budget issues stem from reckless spending and oppose scaling back immigrant healthcare coverage.
  • The proposal now awaits legislature review amid political tensions as Newsom balances fiscal responsibility with California's commitments to immigrants and social programs.
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arcamax.com broke the news in on Wednesday, May 14, 2025.
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