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Prepared by Precision Advocacy
Governor Gavin Newsom released the May revision of his January budget proposal on May 14. Since his proposal was introduced earlier this year, L.A. County suffered massive wildfires and the federal administration has proposed huge cuts to states - in particular, in the health care arena. Below is a high-level snapshot of the budget and proposals we anticipate will impact the county.
The administration is projecting a $12 billion shortfall. General Fund revenues are projected to be $5.2 billion lower over the three-year budget window - 2024-25, 2025-26, and 2026-27 - as compared to the January budget, largely due to the downgraded economic outlook. The May revision doesn’t incorporate the impact of federal cuts currently under consideration in Washington D.C.
The governor proposes to address the funding shortfall through:
- $5 billion in reductions, increasing to $14.8 billion by 2028-29.
- $5.3 billion in revenue/borrowing.
- $1.7 billion in fund shifts in 2025-26.
Housing and Homelessness
The May Revision contains no new funding for housing or homelessness, however, does include $200 million from Proposition 35 funding for rental assistance and housing support for individuals with behavioral health conditions who are experiencing or at risk of homelessness.
Health and Human Services
Medi-Cal: The May revision largely focuses on Medi-Cal reductions related to the undocumented expansion, including:
- An enrollment freeze for undocumented adults 19 and older effective no sooner than January 1, 2026, for General Fund savings of $86.5 million in 2025-26, increasing to $3.3 billion by 2028-29.
- Charging Medi-Cal premiums of $100 per month for undocumented adults 19 and older beginning January 1, 2027, for General Fund costs of $30 million in 2025-26, $1.1 billion of General Fund savings beginning in 2026-27, increasing to $2.1 billion by 2028-29.
- Eliminate per visit payments to community clinics and instead pay fee-for-service rates for services provided to undocumented Californians, for General Fund savings of $452.5 million in 2025-26 and $1.1 billion annually ongoing.
- Reducing long-term care, In-Home Supportive Services, and dental benefits for undocumented adults 19 and older for General Fund savings of $491.8 million in 2025-26 and $1.3 billion ongoing.
- Implementing a rebate aggregator to secure state rebates for drugs provided to undocumented immigrants, for General Fund savings of $375 million in 2025-26 and $512 million ongoing.
Additional proposed reductions include the following:
- Reinstate the Medi-Cal asset limit for seniors and disabled adults of $2,000 for an individual or $3,000 for a couple, effective no sooner than January 1, 2026, for General Fund savings of $94 million in 2025-26, $540 million in 2026-27, and $791 million ongoing.
- Eliminate coverage for GLP-1 drugs for weight loss effective January 1, 2026 for General Fund savings of $85 million in 2025-26, growing to $680 million by 2028-29 and ongoing.
- Limit the payments for Program of All-Inclusive Care of the Elderly (PACE) providers to the midpoint of actuarial rate ranges, except for newly enrolled providers receiving enhanced rates for the first two years for General Fund savings of $13 million in 2025-26 and $30 million ongoing.
- Eliminate approximately $504 million in 2025-26 and $550 million ongoing for Proposition 56 supplemental payments to dental, family planning, and women’s health providers.
- Replace $40 million General Fund in 2024-25 and $45 million General Fund in 2025-26 for the Behavioral Health Bridge Housing Program and $55 million General Fund for Behavioral Health Transformation County Funding in 2025-26 with Behavioral Health Services funds.
- Eliminate acupuncture as an optional benefit for General Fund savings of $5.4 million in 2025-26 and $13.1 million ongoing.
Medi-Cal investments include $31.5 million in 2025-26 to support maintenance and operations of myCAVax – California Vaccine Management System.
Proposition 35 Managed Care Organization (MCO) Tax
- Revenue of $9 billion in 2024-25, $4.2 billion in 2025-26, and $2.8 billion in 2026-27 to support Medi-Cal. Increase of $1.1 billion in 2024-25 and decreases of $200 million in 2025-26 and $400 million in 2026-27. $1.6 billion across 2025-26 and 2026-27 will support increases in managed care payments for primary and specialty care, ground emergency medical transportation, and community and hospital outpatient procedures.
- $200 million is included in the May revision for rental assistance and housing support for individuals with behavioral health conditions who are experiencing or at risk of homelessness.
Behavioral Health Services Act: The administration proposes eliminating $20 million annually that supports peer respite, maternal behavioral health, and full-service partnership performance contracting programs.
In-Home Supportive Services (IHSS)
- Requires counties to assume costs to cover IHSS Community First Choice Option reassessment late penalties, for $81 million General Fund savings in 2025-26.
- Caps IHSS provider overtime and travel hours at 50 hours per week beginning in 2025-26 to save $707.5 million General Fund ongoing.
- Eliminates the IHSS Residual Program for $110.6 million General Fund savings in 2025-26.
Family Urgent Response System (FURS): Reduces FURS by $13 million General Fund in 2025-26 and ongoing, and maintains $17 million General Fund ongoing for FURS, which provides 24/7 mobile response for children in foster care and their caregivers.
Emergency Child Care Bridge: The administration proposes to reduce funding for the Emergency Child Care Bridge program, which provides child care for children in foster care, by $42.7 million General Fund in 2025-26 and ongoing.
CalWORKs: The May revision proposes expanding allowable welfare-to-work activities, making Job Club an optional welfare-to-work activity, simplifying the curing of sanctions, and replacing the county welfare-to-work reporting requirements with administrative data extracts, for an $18.2 million ongoing total fund savings.
Trigger Spending: $456.1 million would be triggered on in 2027-28 contingent upon sufficient resources:
- $338.9 million in 2027-28, growing to $522.1 million in 2028-29 for a foster care tiered rate structure.
- $117.2 million in 2027-28 growing to $163.2 million in 2028-29 for the California Food Assistance Program expansion.
Public Safety
California Advancing and Innovating Medi-Cal (CalAIM) Justice-Involved Initiative Program Support: Reimbursement authority of $21.5 million in 2025-26 and $11 million ongoing and 65 positions ongoing to support implementation of the CalAIM Justice-Involved Initiative and to account for federal reimbursements is included in the May revision. Additionally, a reduction of $6.2 million General Fund in 2025-26, an increase of $3.8 million General Fund in 2026-27, and a reduction of $11 million General Fund ongoing is proposed.
Community Corrections Performance Incentive Grant: $127.9 million General Fund in 2025-26 to support the Community Corrections Performance Incentive Grant, SB 678 (Leno), Chapter 608, Statutes of 2009, which provides incentives for counties to reduce the number of felony probationers sent to state prison.
Incompetent to Stand Trial (IST) Infrastructure Grant Program: The administration proposes a
reduction of $232.5 million General Fund included in the 2022 Budget Act from unspent grant funds for counties to increase residential treatment housing capacity for individuals designated IST.
Miscellaneous
Cap-and-Trade: Set to expire in 2030, the May revision extends the program until 2045. Proceeds have funded nearly $33 billion in investments across the state. The governor proposes to rename the program to the cap-and-invest program and enshrine in guiding principles enabling a stable and predictable price on carbon pollution. He also proposes to designate at least $1 billion annually in cap-and-trade revenues to the High-Speed Rail project.
Governor Encourages Homeless Encampment Ordinances
On May 12, Governor Newsom issued a press release encouraging all local jurisdictions to adopt an ordinance restricting public camping. The administration acknowledges in the preamble to the model ordinance that local jurisdictions are expected to tailor their ordinances to account for local differences and priorities. The governor recommends that 3 basic principles be included in the ordinances - criminal punishment should not be infringed on individuals if a jurisdiction does not offer adequate shelter, shelter and services must be prioritized, and local governments must have adequate authority to clear encampments. The governor notes that encampments pose a public safety risk of fire, violence, criminal activity, property damage , break-ins, and unsanitary conditions.
The model ordinance focuses on the unlawful activity of encampments and enforcement. Unlawful activity includes:
- Constructing, placing, or maintaining a semi-permanent structure for shelter.
- Camping on public property for more than 3 consecutive days in the same location (within 200 feet of the location previously camped).
- Camping within 200 feet of a posted notice to vacate or an encampment clearance.
- Sitting, sleeping, lying, or camping in a manner that impedes passage.
Under the parameters of enforcement:
- Local jurisdictions shall identify and offer shelter and supportive services to persons living in encampments.
- Notices shall be posted at least 48 hours prior to enforcing a notice to vacate an encampment.
- If it is necessary to clear an encampment without a 48 hour notice, as much notice as possible shall be provided, and a notice at or near the encampment regarding where items were taken, how they can be recovered, and by when they need to be recovered shall be posted.
- Personal belongings that are not a health or safety hazard shall be collected, tagged, and stored for not fewer than 60 days following an enforcement action.
Joint Informational Hearing on Military and Veterans Affairs
The Assembly and Senate held a joint Military and Veteran’s Affairs Committee informational hearing on Monday. The focus of the hearing was ongoing support for veterans and ensuring access to services including support through the veterans claims process. The for-profit sector was called out for taking advantage of veterans, in particular for charging them for services that are offered free of charge through county veterans services offices and other organizations, often providing poor quality service that creates bigger problems for vulnerable veterans in the long run.
The hearing was chaired by Senator Bob Archuleta (D-Norwalk) and Assemblymember Pilar Schiavo (D-Santa Clara) and was attended by Assemblymembers Jeff Gonzalez (R-Coachella), Jerry McNerney (D-Stockton), and LaShae Sharp-Collins (D-La Mesa). Panelists included Morgan Boyd, Veterans Services Officer, San Luis Obispo County; Richard Johnson, Veterans Services Officer, Placer County; Deborah Johnson, President/CEO, California Veterans Assistance Foundation; David West, Veterans Services Officer, Nevada County; James Zenner, Director, Military & Veterans Affairs, Los Angeles County; Roberto Herrera, Deputy Secretary, Veterans Affairs; and Katherine Kuzminski, Director of Studies, Center for a New American Security.
The first part of the hearing included representatives of County Veterans Services Offices (CVSO) and focused on the key role they play in supporting California’s 1.4 million strong veteran population, including filing claims, providing housing assistance, and connecting veterans to healthcare.
In 2024 CVSO’s secured $579 million in new VA benefits with a return on investment of $90 for every dollar spent. The program receives $11 million in annual funding from the General Fund, and panelists argued that additional resources are needed to address increased workloads. Panelists also called out the growing threat of for-profit claims agents who exploit veterans and charge them for services that are offered free of charge to veterans through CVSOs. Several panelists decried the practices of these for-profit claims agents and argued for stronger regulation and enforcement.
Panelists picked up an ongoing thread of discussion around veterans moving outside of California for retirement due to affordability and talked about the importance of policy discussions that include tax relief for this group. This thread was included in the Governor’s proposed budget as a state income tax exemption for up to $20,000 in annual military retirement benefits.
Mr. West testified that CVSO’s build lifelong relationships with veterans, advocating for them across decades to ensure their evolving needs are met. CVSO’s connect California's veterans and their families to the benefits and services they earned. He said that recent data confirms the reach and efficacy of CVSO’s work. Although California is home to approximately 8% of the nation's veteran population, CVSOs in the state submitted 12% of all claims received by the United States Department of Veterans Affairs last year.
Panelists emphasized the good work that CVSO’s are doing in connecting veterans to services on a personal level and the need to increase funding and resources for these services. Legislators explored additional ways to get the word out to veteran communities and educate them about the risks of for-profit claims consultants.
Upcoming Hearings
Agendas are typically posted on the committee websites in the Assembly and Senate a few days prior to the hearings. To view hearings after they take place, you may access them in the Assembly or Senate media archives where they are generally available within a few hours of committee adjournment.
Monday, May 19, 9:00 a.m.
Senate Budget And Fiscal Review Subcommittee No. 4 on State Administration and General Government
State Capitol, Room 113
May Revision: All Departments - Open Issues
Monday, May 19, 2:30 p.m.
Assembly Budget Subcommittee No. 1 on Health
State Capitol, Room 126
May Revision: All Departments - Open Issues
Monday, May 19, 2:30 p.m.
Assembly Budget Subcommittee No. 6 On Public Safety
State Capitol, Room 447
May Revision: All Departments - Open Issues
Monday, May 19, 3:00 p.m. (Or Upon Adjournment of Session)
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
1021 O Street, Room 1200
May Revision: All Departments - Open Issues
Tuesday May 20, 9:00 a.m.
Assembly Budget Subcommittee No. 3 on Education Finance
State Capitol, Room 447
May Revision: All Departments - Open Issues
Tuesday May 20, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
1021 O Street, Room 1200
May Revision: All Departments - Open Issues
Tuesday May 20, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor, and Transportation
State Capitol, Room 112
May Revision: All Departments - Open Issues
Tuesday May 20, 9:30 a.m.
Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation
State Capitol, Room 437
May Revision: All Departments - Open Issues
Tuesday May 20, 9:30 a.m.
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 444
May Revision: All Departments - Open Issues
Tuesday May 20, 2:30 p.m.
Assembly Budget Subcommittee No. 1 on Health
State Capitol, Room 126
May Revision: All Departments - Open Issues
Wednesday, May 21, Upon Call of the Chair
Assembly Budget Subcommittee No. 3 on Education Finance
State Capitol, Room 447
May Revision: All Departments - Open Issues
Wednesday, May 21, 9:00 a.m.
Assembly Budget Subcommittee No. 2 on Human Services
State Capitol, Room 126
May Revision: All Departments - Open Issues
Wednesday, May 21, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 1 on Education
1021 O Street, Room 2100
May Revision: All Departments - Open Issues
Wednesday, May 21, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection, and Energy
1021 O Street, Room 2200
May Revision: All Departments - Open Issues
Wednesday, May 21, 1:30 p.m.
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 444
May Revision: All Departments - Open Issues
Wednesday, May 21, 1:30 p.m.
Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government
1021 O Street, Room 2200
May Revision: All Departments - Open Issues
Wednesday, May 21, 1:30 p.m.
Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor, and Transportation
State Capitol, Room 112
May Revision: All Departments - Open Issues
Thursday May 22, Upon Call of the Chair
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 444
May Revision: All Departments - Open Issues
Thursday May 22, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 1 on Education
1021 O Street, Room 2100
May Revision: All Departments - Open Issues
Thursday May 22, 9:00 a.m.
Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection, and Energy
1021 O Street, Room 2200
May Revision: All Departments - Open Issues
Friday, May 23, Upon Call of the Chair
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 444
May Revision: All Departments - Open Issues
Grant Opportunities
Below is a list of the latest grant opportunities released by the state. All opportunities for local jurisdictions may be found here.
Deadline: 8/14/24 00:00
Title: Youth Community Access (2024)
State Agency / Department: CA Natural Resources Agency
Match Funding? No
Estimated Total Funding: $18,300,000
Funding Method: Reimbursement(s)
Deadline: 8/29/25 11:59
Title: GFO-23-312r2 – Round 2 Community Energy Reliability and Resilience Investment (CERRI) Program
State Agency / Department: CA Energy Commission
Match Funding? 33%
Estimated Total Funding: $51,867,013
Funding Method: Reimbursement(s)
Deadline: 5/30/25 12:00
Title:Technical Assistance Program 2022 Special Grant Project
State Agency / Department: Governor's Office of Business and Economic Development
Match Funding? 100%
Estimated Total Funding: $543,000
Funding Method: Reimbursement(s)
Deadline: 7/16/25 17:00
Title: Environmental Enhancement and Mitigation (2025)
State Agency / Department: CA Natural Resources Agency
Match Funding? No
Estimated Total Funding: $8,000,000
Funding Method: Advances & Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning May 7.
May 14: Despite Trump Slump, Governor Newsom’s revised budget delivers on housing, education, water, and jobs
May 14: A pesar del Tumulto de Trump, el presupuesto revisado del Gobernador Newsom ofrece resultados en materia de vivienda, educación, agua y empleo
May 14: Governor Newsom’s budget calls for fast-track of critical water infrastructure project
May 13: California’s groundbreaking water initiative in Tombstone helps residents access safer and cleaner drinking water
May 13: Governor Newsom’s budget to help lower drug costs, expand authority to access medication abortion through CalRx
May 13: Governor Newsom seeks injunction to immediately stop Trump tariffs
May 13: Sacramento breaks ground on project to transform underutilized state land into affordable housing community
May 12: WEDNESDAY: Governor Newsom to release revised budget plan in Sacramento
May 12: Governor Newsom announces billions of dollars for behavioral health treatment facilities and services for seriously ill and homeless thanks to Prop 1
May 12: Governor Newsom releases state model for cities and counties to immediately address encampments with urgency and dignity
May 11: TOMORROW: Governor Newsom to make statewide funding announcement to address California’s mental health and homelessness crisis
May 9: Governor Newsom proclaims Older Californians Month
May 9: California launches new AI-powered chatbot that provides wildfire resources in 70 languages
May 9: Governor Newsom appointed co-chair of U.S. Climate Alliance
May 8: Governor Newsom announces appointments 5.8.25
- Gena Castro Rodriguez, of Daly City, has been appointed to the Board of State and Community Corrections
- Joshua Yang, of Huntington Beach, has been appointed to the Tobacco Education and Research Oversight Committee
- Katie Nair, of Roseville, has been appointed to the Board of Registered Nursing
- Jovita Dominguez, of Castroville, has been reappointed to the Board of Registered Nursing
- John Russell, of El Dorado Hills, has been appointed to the Board of Vocational Nursing and Psychiatric Technicians
- John Bolton, of Huntington Beach, has been appointed to the Private Security Disciplinary Review Committee South
- Jeffrey Dodd, of Napa, has been appointed to the 25th District Agricultural Association Napa Town & Country Fair Board
May 8: Governor Newsom issues statement on Pope Leo XIV, the first American Pope
May 8: California businesses in near-universal compliance with prohibition of intoxicating hemp products harmful to youth
May 8: Governor Newsom announces upgrades to 21 state fish hatcheries to boost salmon populations
May 7: Governor Newsom, Superintendent Thurmond announce over $618 million to support another 458 community schools
May 7: Governor Newsom announces judicial appointments 5.7.25
- Associate Justice Helen Zukin, of Los Angeles County, has been nominated to serve as Presiding Justice of the Second District Court of Appeal, Division Four
- Judge Mark Hanasono, of Los Angeles County, has been nominated to serve as an Associate Justice of the Second District Court of Appeal, Division Three
- Judge Armen Tamzarian, of Los Angeles County, has been nominated to serve as an Associate Justice of the Second District Court of Appeal, Division Four
- Melissa Baloian, of Fresno County, has been appointed to serve as a Judge in the Fresno County Superior Court
- Syna Dennis, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles County Superior Court
- Hoa Hoang, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles County Superior Court
- Lara Bazán, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles County Superior Court
- Brenda C. Robinson, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles County Superior Court
- Maria Jhai, of Los Angeles County, has been appointed to serve as a Judge in the Los Angeles Superior Court
- Michael Mooney, of Orange County, has been appointed to serve as a Judge in the Orange County Superior Court
- Martin Tejeda, of Yolo County, has been appointed to serve as a Judge in the Sacramento County Superior Court
- Jihan Maloney, of San Diego County, has been appointed to serve as a Judge in the San Diego County Superior Court
- Teresa Martinez, of Santa Barbara County, has been appointed to serve as a Judge in the Santa Barbara County Superior Court
- Christopher Van Meir, of Santa Clara County, has been appointed to serve as a Judge in the Santa Clara County Superior Court
- Carol Hubner, of Ventura County, has been appointed to serve as a Judge in the Ventura County Superior Court
May 7: California sues Trump administration for illegally withholding billions in bipartisan infrastructure funds: ‘Another Trump gift to China’
May 7: Tale of two trains: California high-speed rail leaves Texas in the dust
May 7: State invests nearly $33 billion in cap-and-trade dollars to make communities cleaner and healthier.
May 7: Governor Newsom proclaims Children’s Mental Health Awareness Week 2025
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