California Closes $12B Deficit by Cutting Immigrant Healthcare Access

California Governor Gavin Newsom signed a $321 billion state budget aimed at closing a $12 billion deficit by cutting back on progressive priorities, including a landmark healthcare expansion for low-income undocumented adult immigrants. The budget halts new enrollments of undocumented adults in state-funded healthcare starting in 2026 and will require some immigrants under 60, including some legal residents, to pay a monthly premium beginning in 2027. Lawmakers avoided more severe cuts to essential safety net programs by using state savings, borrowing from special funds, and deferring payments, but the budget is contingent on new legislation to ease housing development. Federal policies, including tariffs and immigration enforcement, threaten to reduce California's tax revenue by an estimated $16 billion, raising concerns about future deficits projected to reach $17 billion to $24 billion annually. Republican lawmakers criticized the budget process for excluding their input and argued it fails to address long-term fiscal challenges, increasing borrowing and reducing the rainy day fund without cutting spending. Despite these criticisms, Democratic leaders emphasized the budget maintains substantial reserves and avoids new taxes on everyday Californians.