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The primary election has come and gone. Votes are still being counted and the eventual results in close contests might not be known for weeks.
However, it’s back to work for those already in office, including Gov. Gavin Newsom, and the biggest issue on their agenda is writing a budget for the 2026-27 fiscal year.
The state constitution requires a new budget to be adopted by June 15, leaving little time for Newsom and legislative leaders to resolve many billions of dollars in differences, particularly those involving health and social welfare services to the approximately 15 million Californians poor enough to qualify.
Newsom proposes spending $334.2 billion on those programs — the biggest chunk being Medi-Cal — with three-fourths coming from the federal government. However, due to recent reductions in federal aid and a chronic state budget deficit, Newsom’s budget would whittle down some services.
That doesn’t sit well with advocates for Medi-Cal recipients. They’ve issued a cascade of critical statements in the two weeks since Newsom released a revised budget.
The skeletal budgets that leaders of the Senate and Assembly have published would restore many of those reduced or eliminated services, although the plans differ in detail. Overall, the legislative budgets would add at least several billion dollars in spending, though they don’t provide precise bottom-line numbers.
There’s also a legislative appetite for increasing taxes, especially on corporations, by changing how multinational companies calculate taxable income or requiring big employers to pay a $285 monthly fee for each employee enrolled in Medi-Cal.
The Senate would adopt the $285 employer fee rather than renew a long-standing tax on health plans called the Managed Care Organization tax, which Newsom and the Assembly support.
