Two years later, parts of that agenda are moving forward. A new interagency council intended to improve coordination among workforce programs is scheduled to meet next week. The state also is developing a digital “career passport” meant to help students and workers organize their education, skills and work experience in a format employers can use.

But the money behind some of Newsom’s most visible workforce initiatives is tightening as California confronts another budget shortfall. Under the governor’s proposed 2026-27 budget, several job training efforts would receive little or no new funding. The California Workforce Development Board, one of the state’s main agencies for coordinating workforce programs, could lose about 20% of its staff.

Among the programs facing uncertainty are Newsom’s “high road” training partnerships, which were designed to connect workers with careers that offer better wages, stronger retention and employer involvement. Without additional funding, some programs could shrink or end around the time the next governor takes office, or shortly afterward.

The Legislature has approved a budget that largely reflects Newsom’s proposal. The governor has until the end of the month to sign it.

Workforce groups say the timing is troubling, particularly as Californians continue to struggle with high housing, transportation and living costs.

“At a time when affordability is such a massive concern, it feels like we’re focusing on what things cost and not enough on what people can earn,” Julia Hatton, president of the Rising Sun Center for Opportunity, told CalMatters. Her organization trains workers for construction and climate-related jobs and has received nearly $4 million in state workforce grants.

State finance officials say the administration is not abandoning workforce development. At an April legislative hearing, Allison Hewitt, a budget analyst with the California Department of Finance, said the Workforce Development Board’s budget was not being cut so much as returning to a lower level after several years of unusually large grant allocations.

That explanation drew skepticism from Sen. Maria Elena Durazo, a Los Angeles Democrat.

“You can say that all you want,” Durazo said at the hearing. “But if we’re not proposing funding for that … then you’re basically saying this is gonna be the new policy. The bottom line is without funding, it’s not a reality.”

In an emailed statement to CalMatters, Marissa Saldivar, a spokesperson for Newsom, said the governor’s workforce plan emphasizes “structural changes to benefit students, which does not always require funding.”

H.D. Palmer, a spokesperson for the Department of Finance, said in the same email that the current budget plan includes more than $250 million in new workforce funding, including for health care and construction programs.

That figure is far below the more than $2.2 billion in new workforce grants California approved in the 2022-23 budget year, when the state had far more money available.

For decades, state and federal governments have invested in job training programs, especially for low-income workers and people without college degrees. Results have often been uneven. Some participants end up in low-wage jobs or positions with high turnover, leaving policymakers searching for better ways to connect training with long-term employment.

California’s high road training partnerships were created to address those weaknesses by focusing on programs that involve employers and lead to jobs with livable wages and career growth. The state began making smaller investments in the model around 2014, according to Stewart Knox, secretary of the California Labor and Workforce Development Agency.

In 2021 and 2022, California dramatically expanded those investments, sending hundreds of millions of dollars into programs tied to construction, health care, technology, public-sector jobs, youth apprenticeships and retraining for oil workers affected by refinery closures.

The results have varied. Some grants helped train large numbers of workers for union jobs, while others produced fewer measurable benefits. In one case, a grant intended to train workers at electric vehicle company Proterra was disrupted when the company shut down before workers could begin.

This year, Assemblymember Rick Chavez Zbur, a Los Angeles Democrat, is carrying legislation that would place tighter limits on how high road training money can be used.

Another bill, by Assemblymembers Isaac Bryan of Culver City and Damon Connolly of San Rafael, would give grantees more time to spend funds intended to help oil workers retrain. According to a bill analysis, about 500 of roughly 1,700 eligible oil workers had participated as of May.

Newsom’s broader career education push formally took shape in 2023, when he signed an executive order calling for a master plan that would reshape how California prepares people for work. Released in 2025, the plan called for better coordination among workforce providers, expanded high road training programs and continued support for youth apprenticeships.

Knox said the state is still in the middle of that effort, even if program funding is less robust than it was during the post-pandemic budget surge.

“We’re definitely not done,” Knox told CalMatters. “We’re kind of mid-stage.”

He pointed to other parts of the master plan that are advancing, including growth in dual enrollment, which allows high school students to take college courses, and efforts to help more students receive college credit for prior work experience.

Palmer said the Legislature’s budget proposal includes additional money for both dual enrollment and credit for work experience. Those dollars, however, come from Proposition 98, the constitutionally protected funding stream that largely supports K-12 schools and community colleges, rather than from the workforce budget.

The Shirley Ware Education Center, a national workforce training nonprofit founded in Oakland, was one of the earliest and largest recipients of high road grants. Since 2017, it has received more than $40 million in state workforce funding and used the money to help more than 5,500 workers move into better jobs, mostly in health care.

“When the state was flush with cash, they put a lot of money into these programs,” Executive Director Rebecca Hanson told CalMatters.

Now, Hanson said, California’s budget deficit makes it difficult to argue for more workforce funding when other essential services also face cuts. Her organization’s high road grant runs through 2027, but she said the group has other funding sources and is accustomed to shifts in state support.

“My hope is that by the time we’re talking about 2028, we’ll be able to find other money,” Hanson said.

Original source: CalMatters

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The vote is expected largely because legislators must pass a balanced budget by June 15 under the state Constitution in order to continue receiving pay. But the spending plan approved by the Legislature is not likely to be the final version. Lawmakers and the governor have until July 1 to reach a final agreement on health care, education, homelessness funding and other major programs that affect communities across California, including the Inland Empire.

A major point of disagreement is health care spending. Newsom proposed cuts in response to reduced federal funding tied to a tax and spending law signed last year by President Donald Trump. His plan included restrictions on health coverage for undocumented immigrants, as well as refugees, asylees and survivors of human trafficking.

Legislative Democrats want to push those reductions back by one year while they look for ways to reduce the impact. They also oppose Newsom’s proposal to raise monthly Medi-Cal premiums for undocumented immigrants from $30 to $50, preferring to leave that decision to the next governor.

Sen. John Laird, a Santa Cruz Democrat who chairs the Senate budget committee, said the Legislature is trying to buy time and avoid deeper cuts if possible.

Lawmakers also rejected Newsom’s plan to bring back stricter asset tests for seniors and adults with disabilities enrolled in Medi-Cal by July. Instead, they proposed a less restrictive limit beginning in the 2027-28 fiscal year. With bipartisan support, legislators also turned away proposed reductions to the In-Home Supportive Services program, which helps older adults and people with disabilities remain in their homes.

The Legislature did agree with Newsom on one health care item: $300 million to help subsidize private health coverage for low-income Californians.

Education and child care are another central part of the budget debate. Democratic lawmakers want to add 22,000 state-funded child care slots over the next several years and rejected Newsom’s proposed cut of 6,800 state-supported slots. The added spaces would focus on children 3 and younger, an age group advocates say has not benefited from the state’s expansion of transitional kindergarten for 4-year-olds.

Lawmakers are also proposing $2.7 billion more for transitional kindergarten through 12th grade schools and community colleges than Newsom included in his May budget revision, based on a more optimistic revenue forecast.

Still, education groups say the Legislature did not go far enough. They had urged lawmakers to reject Newsom’s plan to withhold $3.9 billion in constitutionally guaranteed school funding as a way to avoid overpaying districts if projected revenue does not arrive.

David Goldberg, president of the California Teachers Association, accused state leaders of relying on budget maneuvers instead of fully funding schools and said the union is prepared to hold them accountable.

Counties would also receive more support under the Legislature’s plan. The proposal includes additional funding to help counties handle expanded eligibility checks for residents applying for food assistance and health care benefits, requirements tied to Trump’s federal spending law.

The Legislature also wants to provide $125 million to help counties rebuild indigent care programs for low-income residents, which were largely scaled back after the Affordable Care Act took effect. On homelessness, lawmakers propose $900 million for the state’s homelessness fund, compared with $500 million in Newsom’s plan.

To raise revenue, lawmakers are aligned with Newsom on three tax proposals. One would apply sales tax to most business software, including platforms such as Slack and Microsoft products. Another would limit the amount of tax credits large corporations can claim. A third would extend a tax on Medi-Cal health providers, a tool the state has used to draw down additional federal funding.

Those measures would not need voter approval, but they would require two-thirds support in both houses of the Legislature. The proposals come after California voters rejected many local tax measures in the June primary.

Senate Democrats had also considered a monthly charge on large employers whose workers are enrolled in Medi-Cal, but they have stepped back from that idea. Instead, they are asking the next governor to present “fully viable options” next year.

Lawmakers and Newsom also agree that California should be able to save more money in its rainy day fund, though they have not settled on the details. Under current law, the state is required to make deposits into the reserve, but the fund cannot exceed 10% of general fund tax revenue.

Changing that cap would require voter approval. Legislators are considering whether to place a measure on the November ballot to allow the state to save more for future downturns. They face a June 25 deadline to decide what, if anything, to put before voters.

Original source: CalMatters

The post California Democrats Reach Budget Deal With Spending Above Newsom’s Proposal appeared first on The Hemet & San Jacinto Chronicle.

Last year, the state committed $15 million to support the California Local News Fellowship and the Propel Initiative, two programs aimed at strengthening local reporting and community-based news organizations. Supporters say the funding marked a significant public investment in journalism at a time when many communities are seeing fewer reporters covering schools, city halls, public agencies and neighborhood issues.

That funding, however, was not included in the Legislature’s proposed budget. Unless legislative leaders and Gov. Gavin Newsom restore the money before the budget is finalized, the programs could lose support just as organizers say they are beginning to show results.

The debate comes as California faces a period of major political and social change. Voters will choose a new governor in the coming year, and communities across the state continue to confront economic uncertainty, wildfires, other natural disasters, rapid changes in technology and a complicated information landscape.

Advocates for local news funding argue that reliable, community-based reporting is especially important in those conditions. Nationally, more than 70% of journalism jobs have disappeared over the past two decades, and nearly one-third of local newspapers have closed, according to research from Northwestern University’s Local News Initiative.

The decline has affected communities across California, including areas where residents depend on ethnic media, in-language reporting and small local outlets for information they do not receive elsewhere. Supporters say the loss of trusted local coverage can leave residents more vulnerable to misinformation, reduce civic participation and weaken public accountability.

The California Local News Fellowship, launched in 2023, has placed more than 110 journalists in newsrooms throughout the state. Those fellows have produced more than 10,000 stories, according to program supporters. More than one-third of the first graduating class has since been hired into permanent positions by their host newsrooms.

The program was designed not only to add reporting capacity, but also to help develop a journalism workforce that better reflects California’s diversity.

The Propel Initiative focuses on the institutions that serve local and ethnic communities. The effort is a partnership involving the Robert C. Maynard Institute for Journalism Education, California Black Media, American Community Media and the Latino Media Collaborative. Together, participating outlets serve more than 20 million Californians.

This spring, Propel convened journalists, editors, publishers, freelancers and students from ethnic, community, local and legacy media organizations for training in storytelling, audience engagement, leadership, innovation and sustainability.

This summer, the initiative is expected to launch Fire Up, an entrepreneurship program intended to help emerging media leaders and local news organizations improve their business models and work toward long-term stability.

Martin G. Reynolds, co-executive director of the Maynard Institute and former editor-in-chief of The Oakland Tribune, has urged state leaders to continue supporting the programs. He cited the philosophy of Robert C. Maynard, who emphasized that all Americans should have “front door access to the truth.”

Supporters say continuing the funding would help preserve access to reliable information, strengthen civic participation and sustain news organizations that serve California’s diverse communities.

Original source: CalMatters

The post California Lawmakers Weigh Local News Funding Cuts as Industry Pressures Mount appeared first on The Hemet & San Jacinto Chronicle.

At the center of the dispute is a plan approved by the California Air Resources Board that would provide free pollution allowances to oil refineries and other large industrial polluters if they commit to investments in clean energy or efficiency upgrades. Senate Democrats say the program threatens a climate-funding agreement reached last year between Newsom and lawmakers, and they are trying to use the state budget to stop it.

Sen. Eloise Gómez Reyes, a San Bernardino Democrat who chairs the Senate’s climate budget subcommittee, said the state should honor the agreement that was negotiated when lawmakers extended California’s carbon market through 2045.

“We really need to stay to the deal,” Reyes said.

The Senate’s budget proposal, released last month, would block the new incentive program until the administration shows the state can still fund the climate commitments made in last year’s agreement. Senate Democrats are calling their approach “Deal is a Deal,” a pointed message to Newsom as budget negotiations continue.

The stakes are substantial. Money from California’s carbon market helps pay for programs such as public transit, safe drinking water, neighborhood air monitoring, wildfire protection and affordable housing near transit. Many of those programs are intended to benefit communities that face heavy pollution burdens and limited public investment.

The Senate plan also puts pressure on some of Newsom’s own priorities, including funding for high-speed rail, wildfire programs, electric vehicle incentives and a proposed tax credit for sustainable aviation fuel.

California’s carbon market, launched in 2013, is designed to limit greenhouse gas emissions by requiring major polluters to obtain allowances for the carbon they emit. Companies can buy those allowances at state auctions, generating billions of dollars for climate-related programs.

Last year, Newsom and lawmakers agreed to extend the system, now rebranded as “cap and invest,” through 2045. The agreement set a spending order for the money raised through carbon allowance auctions. Under that deal, high-speed rail would receive $1 billion annually before many other programs, and lawmakers would control another $1 billion each year for their own priorities.

Other programs, including affordable housing near transit, cleaner buses and rail service, safe drinking water, wildfire prevention and local air monitoring, were placed further down the funding list.

But last month, amid concerns over rising gasoline prices and after heavy lobbying from the oil industry, the Air Resources Board adopted changes that reduce the number of allowances sold at auction through 2030. With Newsom’s support, the board also created the Manufacturing Decarbonization Incentive, which could provide up to $4 billion in free allowances to companies that invest in emissions reductions. About half of that amount is expected to go to the fossil fuel industry.

Critics say the changes could dramatically shrink the money available for climate programs. The Legislative Analyst’s Office has estimated the new rules could cut annual auction revenue from about $4 billion to roughly $2 billion, potentially leaving little or no funding for some community-focused programs.

Sen. Scott Wiener, a San Francisco Democrat, criticized the state’s response to pressure from the oil industry.

“It’s unfortunate that the state of California empowers the oil industry to freak everyone out and adopt bad policies,” Wiener said.

Newsom’s office defended the changes, saying they are meant to keep the carbon market stable while addressing costs for consumers and industry.

Anthony Martinez, a spokesperson for the governor, said the administration is trying to preserve California’s climate program in a difficult political and economic environment.

“That is not a retreat from climate leadership — it’s how California keeps leading while the federal government is retreating,” Martinez said.

The Senate’s counterproposal would preserve the $1 billion controlled by lawmakers and then direct up to $2 billion toward housing, transit, clean air and drinking water programs. Newsom’s priorities would be moved lower in the funding order. If carbon-market revenue falls to $2 billion, programs such as Cal Fire, high-speed rail and other administration priorities could receive little or no money from that fund.

Sen. Jesse Arreguín, an Oakland Democrat who chairs the Senate housing committee, questioned why the state would risk reducing funding for affordable housing during a severe housing crisis.

“Why, at this time … would we take away critical funding to build affordable homes in California?” Arreguín said.

Wiener said transit systems also should not be left vulnerable to annual funding fights.

“Every year, transit funding becomes a political football,” he said.

Assembly Democrats have not taken the same position as the Senate. Their budget plan does not directly address the Air Resources Board rule change, and they have not advanced an alternative. Assemblymembers Jacqui Irwin and Cottie Petrie-Norris, Democrats who lead key climate and energy committees, have supported the board’s approach, saying it reflects the Legislature’s interest in affordability, including the possibility of providing more help with electricity costs.

Newsom and lawmakers face a June 30 deadline to approve a state budget before the new fiscal year begins. However, much of the climate spending dispute could continue beyond that date, since some of the funding decisions can be worked out before the legislative session ends in September.

The fight has already slowed some of the governor’s proposals. Newsom in January proposed spending $200 million on electric vehicle incentives, including $115 million from the climate fund. Senate Democrats have delayed negotiations on that item, and discussions could continue through the summer.

The Senate also rejected Newsom’s proposal for a sustainable aviation fuel tax credit. The governor has argued the credit would encourage production of cleaner fuel and support refinery jobs. The proposal would allow eligible producers to pay less into the state’s road repair fund. It followed lobbying by Phillips 66, the only company that has publicly said it would benefit from the tax credit.

Supporters of the Air Resources Board’s new manufacturing incentive program say it is a practical tool for reducing emissions while keeping major employers in California. The board says companies would receive allowances only if they cut their own emissions and that the program includes safeguards requiring companies to return allowances if they fail to meet their commitments.

Lindsay Buckley, a spokesperson for the Air Resources Board, said the cap-and-invest program was revised to reduce pollution in a cost-effective way, protect ratepayers and keep businesses operating in the state.

“The program was never designed to maximize auction revenue,” Buckley said.

Opponents see the program differently. They argue that giving free allowances to major polluters amounts to a subsidy without enough assurance that emissions will actually fall. Some critics also warn the changes could make it harder for California to meet its legally required 2030 climate targets.

The Air Resources Board approved the overhaul on a 10-3 vote, but several members raised concerns. Before the new incentive program begins, the board required further review.

The Senate proposal would restrict climate-fund spending unless the Department of Finance certifies that last year’s agreement can still be funded. It also would prevent the Air Resources Board from distributing the new industrial allowances unless state officials determine the program aligns with California’s climate goals, helps lower gasoline prices and leaves enough funding for endangered climate programs.

The dispute could carry broader political consequences for Newsom, who has often presented California as a national and international leader on climate policy.

Katie Valenzuela, a policy advocate who works on environmental justice issues, said the rule change could damage the governor’s climate record if it is not revised.

“If this rule goes forward and isn’t fixed, this is a huge stain on his climate legacy,” Valenzuela said. “He is showing loud and clear that the most vulnerable residents who are most impacted by climate change are not his priority.”

Original source: CalMatters

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The spending plan for the 2026-27 fiscal year carries major implications across the state, including for Southern California and the Inland Empire, where many residents rely on Medi-Cal and other health and social service programs. At the center of the negotiations are billions of dollars in disagreements over how much California should spend, what services should be preserved and whether new taxes should be used to help close ongoing budget gaps.

Newsom’s revised budget proposes $334.2 billion for health and human services, with Medi-Cal making up the largest share. About three-quarters of that funding comes from the federal government. But with federal aid reduced and the state still facing a persistent budget deficit, the governor’s proposal would scale back some services.

Those proposed reductions have drawn sharp criticism from advocates for Medi-Cal recipients, who have issued a series of objections since Newsom released his revised spending plan. Medi-Cal serves roughly 15 million low-income Californians.

Legislative leaders in both the Senate and Assembly have put forward budget outlines that would restore many of the services Newsom seeks to reduce or eliminate. The two legislative plans vary in details, but both would increase spending by at least several billion dollars. Neither plan lays out a precise final bottom line.

Lawmakers are also weighing tax increases, particularly those aimed at corporations. Proposals include changing how multinational companies calculate taxable income and imposing a $285 monthly fee on large employers for each worker enrolled in Medi-Cal.

The Senate has proposed adopting that employer fee instead of renewing the state’s long-standing Managed Care Organization tax, which is supported by Newsom and the Assembly. The current tax on health plans generates about $4.5 billion per year and has helped California draw additional federal health care dollars. It is set to expire at the end of the year.

The future of that tax is complicated by new federal limits and by Proposition 35, a 2024 ballot measure approved by California voters that requires proceeds from the tax to be used for medical services rather than non-medical programs.

The California Association of Health Plans opposes renewing the managed care tax, arguing that doing so would conflict with the 2024 ballot measure and increase consumer health care costs by $1.5 billion annually.

The debate reflects the broader challenges facing Newsom and legislative leaders as they decide whether to offset federal funding cuts, restore services targeted for reductions and raise taxes to help pay for it all.

Health and welfare programs are expected to dominate the budget talks because of their size and cost, but they are not the only unresolved issues. The spending plan will be Newsom’s eighth and final budget as governor.

Newsom has said his revised proposal would close the gap between state revenues and spending, a problem that first emerged in 2022 and has continued since. He has argued that the plan would prevent his successor from inheriting a structural deficit when the next governor takes office in January.

Still, many of the tools used to balance the proposal are temporary. They include drawing from emergency reserves, relying on loans outside the main budget framework and using revenue that may be tied to a short-term boost from taxes connected to the artificial intelligence industry.

Legislative Analyst Gabe Petek has cautioned that the state remains financially vulnerable. In a review of Newsom’s budget, Petek wrote that California’s reduced reserves and growing debt leave it poorly positioned if revenues fall below expectations.

As the June 15 deadline approaches, the remaining question is whether state leaders will craft a long-term solution or once again rely on short-term measures to keep the budget in balance.

Original source: CalMatters

The post Medi-Cal Cuts, Tax Hikes Loom as State Lawmakers Negotiate Budget appeared first on The Hemet & San Jacinto Chronicle.

Newsom has promoted his revised budget as a step toward restoring California’s fiscal footing before he leaves office, saying his administration has produced “a balanced budget structurally for 18 months.” The word “structurally” has become central to the debate because California has faced a continuing mismatch between spending commitments and ongoing revenue.

According to Legislative Analyst Gabe Petek, state budgets over the past four years have spent a combined $125 billion more than California actually brought in, after Newsom and the Legislature expanded programs based on revenue projections that proved too optimistic. Budget analysts commonly refer to that kind of ongoing imbalance as a structural deficit.

Newsom’s proposed $349.4 billion budget for the 2026-27 fiscal year, which begins July 1, estimates $226.5 billion in general fund tax revenue. But planned general fund spending would total $246.6 billion, leaving a roughly $20 billion gap. The shortfall is smaller than in some recent years, but it continues to raise questions about whether the state has truly solved its underlying budget problem.

The administration would close the gap through a combination of higher-than-expected short-term revenue, spending reductions, borrowing and other budget maneuvers. Still, the budget documents acknowledge that deficits are expected to continue in future years, though they may be smaller than earlier projections.

Petek has cautioned that the proposal still leaves California “ill-prepared” for even a modest downturn in revenue.

Newsom has defended the plan, saying, “We’re cutting deficits but not cutting corners.” But as the June 15 deadline approaches, advocates for schools, health care and social services are pressing legislators to reject cuts or funding delays affecting programs for low-income residents, children and people with disabilities.

At the Capitol, rallies and press events have become frequent as organizations seek to protect their funding. Education groups are especially critical of Newsom’s proposal because they say it withholds money that schools are entitled to receive under Proposition 98, the constitutional formula that sets minimum funding levels for K-12 schools and community colleges.

Last week, the California School Boards Association joined school unions and other education organizations at a rally outside the Capitol, calling on Newsom and legislators to provide the funding they say schools are owed.

Debra Schade, president of the school boards association, said Proposition 98 is “a matter of law, not a suggestion that can be discarded when it becomes inconvenient for policymakers.”

She criticized the administration for what she described as a third straight year of attempts to alter the minimum school funding guarantee. “Once we open the door to the idea that Proposition 98 can be manipulated whenever the state faces fiscal pressure, we fundamentally weaken the protections voters deliberately put in place for California students,” Schade said.

Health care advocates are also pushing back. Supporters of dental care for children in Medi-Cal released a report warning that more than 1.2 million low-income California children could lose access to dental services if Newsom’s proposed Medi-Cal dental reductions are approved.

Child care and early education advocates have objected as well, saying the governor’s plan would reduce all child care and pre-kindergarten programs by 2% in real spending. They argued that the proposal marks a reversal for a governor who has previously emphasized early childhood programs and family support.

The Legislature’s Democratic supermajority has historically supported many of the programs now at risk, and some lawmakers are expected to be sympathetic to advocates’ concerns. Raising taxes could be one way to avoid deeper reductions, but Newsom has shown little interest in ending his governorship with a major tax increase.

That sets up a difficult choice for Democratic legislators: accept reductions to programs they have championed, or challenge the governor’s budget framework in the final weeks of negotiations. The outcome will determine not only how the state closes its immediate deficit, but how much strain schools, health care providers and social service programs may face in the year ahead.

Original source: CalMatters

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The California Department of Corrections and Rehabilitation has repeatedly fallen short of its own savings goals, yet the state has continued to raise the department’s budget. That approach leaves taxpayers paying for unused capacity instead of forcing a serious review of where prison spending can be reduced.

The issue is especially relevant in the Inland Empire, where state prisons and related facilities have long been part of the regional landscape, including in communities such as Norco. Decisions made in Sacramento about correctional funding directly affect local institutions, workers, families and taxpayers.

Maintaining excess prison beds is not the same as improving public safety. If the state has fewer people in custody than its prison system was built to hold, leaders should be asking why costs remain so high and whether resources could be better directed elsewhere.

California’s prison budget should reflect actual need, not outdated assumptions. Continuing to increase spending while savings targets are missed undermines public confidence and makes it harder to fund other priorities across the state.

A safer California requires accountability, fiscal discipline and a correctional system sized to today’s realities. Paying for beds that are not needed does not accomplish that.

The post Paying for prison beds we don’t need doesn’t keep California safe appeared first on The Hemet & San Jacinto Chronicle.

It also left a litany of unanswered questions: who came up with the narrow criteria, how many hospitals would qualify and whether the funding will be enough to prevent hospital closures in the near term.

Assembly Bill 108, signed into law last week, will provide grants to public and nonprofit hospitals that meet several criteria, including having less than 10 days of cash on hand and having more than half of their patients on government-funded insurance programs or uninsured. The goal is to tide eligible hospitals over until July 1, when the new fiscal year begins, said Sen. John Laird, a Santa Cruz Democrat who chairs the Senate Budget Committee and championed the funding bill.

The measure, put in print on May 4, flew through both legislative chambers in just three days before Gov. Gavin Newsom signed it within hours. By Monday, the program was up and running and hospitals had just a week to apply. The Department of Health Care Access and Information will announce recipients May 26.

“It is a rare occurrence for bills to go from the starting block to the finish line in just a few days,” said veteran lobbyist and Capitol watcher Chris Micheli, who said the speed reflects the urgent need of hospitals and a consensus among leaders.

Hospital leaders interested in applying said they were pleased the Legislature acted so quickly, though some are scrambling to meet the application deadline after learning about it just a week ago.

Laird told CalMatters that he knows of two to three hospitals that will likely qualify but declined to name them, arguing that doing so could scare off vendors and hospital staff.

When pressed, he acknowledged that potential recipients include Watsonville Community Hospital in his own district.

“This bill comes at a completely inopportune time in the budget process, and the time was not dictated by us,” Laird said during a budget hearing last Tuesday. “It was dictated by a few hospitals going under.”

The criteria are so narrow and the bill moved in such an “expedited fashion” that it seems tailored to the needs of a specific hospital, said Assembly Budget Committee Vice Chair David Tangipa, a Fresno Republican, who voted for the bill nonetheless.

“It says 10 days. Why not put it at 30 days?” he said. “They needed to make sure that even though it appears to be a general fund that all of these other hospitals could apply for, that probably only one hospital met all of those qualifications.”

Neither Laird nor the finance department staff was able to explain how they came up with the criteria, including why they picked 10 days — instead of any other number — of cash on hand to indicate a dire enough financial situation. Hospital administrators said the typical goal is at least 90 days of cash on hand.

The ambiguity frustrated some state lawmakers, who repeatedly pressed for clarity during the budget hearing. Sen. Chris Cabaldon, a Napa Democrat, called the lack of answers “profoundly disturbing.”

“It’s been one long ‘I said what I said’ hearing,” he said. Still, he voted for it.

Others lamented that the criteria, especially the 10-day threshold, should have been expanded to allow more hospitals to compete for the funding.

“Right now, it’s far too narrow, and really by this time the hospital has gone over the cliff,” Sen. Lola Smallwood-Cuevas, a Los Angeles Democrat, told CalMatters in an interview. She, too, voted for it. “We want to figure out who’s standing on the cliff, who’s a few feet from the cliffs, who’s a mile from the cliff.”

The $25 million grant comes as hospitals across California, particularly in rural areas, say they are at risk of dropping services or shutting their doors due to rising labor costs and federal Medi-Cal funding cuts.

The funding woes sparked calls for renewed funding for the state’s Distressed Hospital Loan Program, which in 2023 gave 16 financially distressed hospitals nearly $300 million. Of those, 15 have asked for more time to repay the debt, and nine of them have also applied for loan forgiveness, according to the California Health Facilities Financing Authority.

The California Hospital Association, which represents nearly 400 hospitals, is sponsoring a bill to put another $300 million into the loan program. Senate Democrats proposed $200 million in funding in mid-April but have not specified if the dollars would be a loan or a grant.

Newsom proposed up to $50 million toward hospitals in “immediate and significant financial distress” in 2026-27 in his budget revision Thursday.

A few hospitals plan to apply

Watsonville Community Hospital, which has publicly shared its financial struggles, reported having 8 days of cash on hand in the last quarter of 2025, according to the most recent financial records collected by the state. The hospital received an $8.3 million state loan in 2023 as part of the distressed hospital program lawmakers passed that year. When asked about the hospital, Laird said the hospital is “quite likely” to be eligible.

“This is critically important for the hospital as we navigate fiscal challenges brought on by funding delays and cutbacks at the federal level,” hospital spokesperson Jennifer Murray said in an email.

Hospitals in the Central Valley and rural Southern California also could benefit from the grant, according to Laird.

Madera Community Hospital told CalMatters it intends to apply for a slice of the grant money. The hospital reopened its doors in March 2025 after closing at the start of 2023. American Advanced Management, the company that took over the hospital, received $57 million from the state to reopen it. State data show the hospital ended 2025 with two days of cash on hand.

Delays in reimbursements and low patient volume in its outpatient clinics are contributing to Madera Community’s slower-than-expected recovery, said Matthew Beehler, a spokesperson for the hospital. He said Madera Community is still working on contracting with some insurers and is not yet receiving funds from the Hospital Quality Assurance Fee, a state-federal supplemental payment program for hospitals that serve a high number of Medi-Cal and uninsured patients. State data show that in 2022, before the hospital closed, it relied on more than $16 million in supplemental payments.

The $57 million from the state, Beehler said, helped cover the hospital’s first six months of operations. Beyond that, American Advanced Management has covered the shortfalls.

“I think that we are headed towards the path of real sustainability for the hospital,” Beehler said. “It just takes time to have all that sort of reach its state of equilibrium.”

In the Eastern Sierra, Dr. Kevin Flanigan, CEO of the Southern Inyo Healthcare District, said he, too, plans to apply for the state’s emergency grant. He said his hospital needs about $1 million to get through 2026. However, he does not know if his hospital will qualify given the 10 days of cash on hand criteria. He said Southern Inyo’s cash balance fluctuates anywhere between 18 to 20 days of cash to 8 to 10 days — grim in either case.

If his hospital doesn’t qualify for a grant? “Then God willing, we find money elsewhere. If not, we begin the process of closing certain things,” Flanigan said. Southern Inyo is a small hospital, with only four acute care beds, 30 skilled nursing beds and an outpatient clinic; there isn’t much to cut from, he said.

“We are clearly one of the most precarious hospitals in the state.”

Unanswered questions

Laird told CalMatters he is confident the $25 million will be enough to save hospitals facing the most imminent threat of closure.

But it’s unclear how he and the finance department arrived at the dollar amount. Department of Finance spokesperson H.D. Palmer said the figure represents the administration’s “best assessment of potential funding needs” and is partly based on the Distressed Hospital Loan Program, which gave 16 hospitals an average of $19 million each to keep them afloat for several years.

Laird said the amount was based on the number of hospitals legislators “informally” think would be eligible. Whatever is left untapped by June 30 would revert back to the state, he said, and legislators could add more funding if it runs out.

“It is what we think is necessary now,” Laird said.

The Department of Health Care Access and Information collects and publishes financial data from hospitals quarterly, but that data lags. Which hospitals qualify for the grant will depend largely on their self-reported finances as of April 15, the department said.

Many state lawmakers want more answers, too. Sen. Shannon Grove, a Bakersfield Republican, grilled finance department staff over the bill details.

“How long is this lifeline going to last? Is it even going to save the people who are in the 10-day timeframe?” she asked.

“That is the intent,” said Lupe Manriquez of the Department of Finance.

“I know it’s the intent. Is it going to save them?” Grove pressed.

“That’s the goal,” Manriquez answered.

Cabaldon told the staff he wouldn’t even bother asking about the criteria because “I already know what the answer is going to be.”

“It is incumbent on this committee to be able to have real answers to the questions that are posed about the why and the evidence,” Cabaldon said. “We are not having a conversation. We are asking questions of fulfilling our constitutional role in this process and getting zero answers.”

Palmer called the heat on his staff “undignified sniping and sarcasm,” noting that the bill originated from the same legislative chamber that’s now questioning it.

“They asked for our assistance in the expedited consideration of the bill outside of the regular budget process — and we complied and cooperated,” Palmer said in an email. “If members were either unable or unwilling to do some basic homework on their own bill that they wanted to be put on a fast track, then that’s a question that’s better posed to them — not us.”

How long a lifeline?

But throwing money at hospitals to keep them afloat is not the answer, some lawmakers argued.

“We can’t just keep giving $25 million handouts over 10 days where a hospital is looking to close,” Smallwood-Cuevas said, noting that President Donald Trump’s H.R. 1, which sharply reduces federal spending on Medicaid, could devastate hospitals.

“What is the state doing to identify and support vulnerable safety net hospitals before they reach the point of fiscal crisis? That is an answer I want to hear.”

Some hospital administrators also called for longer-term solutions. Katherine Burnworth, board president of the Imperial Valley Healthcare District, which oversees Imperial County’s two hospitals, told CalMatters that while she appreciates state action, $25 million statewide “is a drop in the bucket compared to the scale of the problem.”

“That may help a small number of hospitals avoid a near-term emergency, but it does not address the ongoing instability that communities like ours live with year after year,” Burnworth said.

While acknowledging the importance of emergency grants, Republicans on the committee argued that California has shortchanged hospitals’ Medi-Cal reimbursements. The California Hospital Association estimates that hospitals are reimbursed 74 cents for each dollar they spend on Medi-Cal patients. Hospitals that see a high share of Medi-Cal patients do get supplemental payments to help offset some of the gaps in reimbursement.

The GOP lawmakers also said that some state regulations, such as a minimum wage hike for health care workers and the requirement that all hospitals comply with new seismic safety requirements by 2030, will burden hospitals with high costs.

“We are throwing Band-Aids on everything, when really we need to just get together and fix the issues of what are the unfunded state mandates that are on our hospitals right now,” Tangipa said.

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Newsom is eager to safeguard programs that have defined his tenure as the leader of the nation’s most populous state and one of the world’s largest economies. As he gears up for a possible presidential run in 2028, the Democrat is promoting the budget as fiscally responsible, saying it protects California’s values but also builds up the state’s rainy day funds — a pointed rebuke to critics who say the state spends more than it has.

The state’s spending has grown more than $100 billion since 2020, according to legislative budget analysts.

“We’re cutting deficits. But we’re not cutting corners,” Newsom said.

Newsom can’t seek a third term and will leave office in January.

Revenues, driven mostly by the booming stock market and the artificial intelligence industry, are $16.5 billion higher than projections in January. That will help the state avoid a $2.9 billion deficit projected in January, guarantee no budget hole next year and cut the shortfall the following year in half, his office said. Newsom also wants to set aside $9.7 billion in a holding account to help balance future budgets.

California faced tens of billions of dollars in budget deficits several years in a row, forcing painful cuts last year such as a rollback on a promise to provide free healthcare to low-income immigrants without legal status. Nonpartisan budget analysts previously projected the state will see budget holes upward of $20 billion each year in the next few years. Newsom and the analysts sometimes differ in their estimations.

Still, Democrats are bracing for federal funding cuts in healthcare and the impacts of high costs on everything from gas to energy because of the war in Iran. State officials repeatedly have said California can’t backfill all the federal dollars.

Republican lawmakers said Newsom’s plan didn’t go far enough to address future budget problems. Republicans are largely excluded from budget negotiations because Democrats have supermajorities in both chambers.

“Governor Newsom appears to define fiscal success narrowly: if the budget doesn’t collapse on his watch, it’s a balanced one,” Assemblymember David Tangipa said in a statement.

Newsom also blasted President Donald Trump and his policies, including in his budget presentation a photo depicting the president and Treasury Secretary Scott Bessent as characters in the movie “Dumb and Dumber.” Trump “doesn’t particularly give a damn about the financial situation of the average American,” Newsom said.

The budget proposal will officially kick off the final stretch of negotiations between Newsom and Democrats in the Legislature, who have to pass a budget by the end of June.

State lawmakers this year are considering several proposals to increase taxes on corporations to help with budget problems. Newsom has largely avoided raising taxes to boost revenues in past years. Now, he wants to cut fees for new small businesses, limit some tax credits starting in 2027 and impose a sales tax on some digital software and cloud-based services.

The two tax measures could generate more than $1 billion the first year of implementation, according to the governor’s estimation. Newsom is against a ballot initiative for a one-time tax on billionaires that will likely go before voters in November.

He also proposed to increase the monthly premiums for adult patients without legal status in the state-funded healthcare program, up to $50 from $30. The premiums were part of last year’s budget and are set to take effect in July for adults under 60 years old. Democrats in the Senate already signaled they will fight the plan.

California has a progressive tax system that relies on rich people, meaning it gets about half its revenues from just 1% of the population. When the economy is good, rich people pay more in taxes and revenues can soar quickly. When the economy is bad, they pay less and revenues can drop just as fast.

The state could also see a revenue boost from expected upcoming initial public offerings by several major artificial intelligence companies, which are expected to be the largest IPOs in history. But legislative budget experts warned of a potential AI bubble that could worsen the state’s finances.

Newsom’s Thursday proposal also includes a $300 million plan to backfill some of the loss of government-sponsored health subsidies, a $5 billion education grant for teacher training and $100 million to help Los Angeles-area homeowners rebuild after the devastating wildfires last year.

The post Newsom outlines his final budget proposal with no deficit, new major spending appeared first on The Hemet & San Jacinto Chronicle.

“The differences (from year-to-year) were subtle,” UC Riverside School of Public Policy Dean Mark Long told the board Tuesday. “Infrastructure was a little bit more emphasized this year than last. I didn’t come away with any surprise. These surveys are useful information, but I wouldn’t take them as purely what you should do as supervisors.”

Long, as well as two graduate students — Andres Gugig and Esther Mejia — were retained by the county Executive Office to conduct the 2026-27 Community Budget Priorities Survey over the winter. The online polls took place ahead of a series of community workshops held in each of the five supervisorial districts.

The surveys taken during the workshops provided only a very small sampling of opinion, while the online questionnaires received wide participation, with a total 26,543 respondents, according to documents posted to the board’s agenda Tuesday.

It was the second year the county commissioned a countywide survey. The previous one, completed in winter 2025, reflected that the highest level of interest was in public safety.

While the latter slipped into second place this year, it was a marginal difference from public works, which landed a 64% rating among all respondents, compared to 60% for public safety.

The other priorities were healthcare at 53%, human services at 49%, government finance at 23% and “internal services” — the public sector’s inter-agency operations — at 4%.

The survey team said “key words” were the determinants of how to classify respondents’ answers to the online questionnaires. For public works, terms such as “road maintenance” and “pothole repairs” were what amplified understanding of residents’ priorities, according to the team.

“People could write whatever they wanted,” Gugig told the board. “But I think if it was things that affect them on a daily basis, that’s what they wrote about.”

The team said poorly lit and damaged streets, or corridors where flooding is an issue, would push a higher number of responses into the public works category.

The Second District’s residents responded at the highest level, with just under 7,000 respondents to the survey. The district encompasses Canyon Lake, Corona, Eastvale, Jurupa Valley, Lake Elsinore, Temescal Valley and multiple other communities.

The lowest response rate was in the Fifth District, where there were 4,435 respondents. The district includes Banning, Beaumont, Calimesa, Hemet, Moreno Valley and San Jacinto. Most of the survey takers were English speakers, though 599 responses were exclusively in Spanish.

One Fifth District resident and a frequent commentator on county business, Roy Bleckert, told the board the survey results should speak less to what the supervisors should do and more of what they should refrain from doing.

“Practically everything that comes through here, as you grow the government monster bigger, makes the lives of everyone in Riverside County harder,” Bleckert said. “The more you spend, the worse everything becomes. When do you start to drop, like Sweden did, the influence of government and empower the people you serve?”

Another speaker, Veronica Langworthy of the Third District, touched on a similar topic, saying the results reflected how the board can make people’s lives better by reducing government red tape.

“If you can drop fees to adopt animals from county shelters, how about dropping fees for humans?” she said. “It’s impossible for people to house because of the fees from government on property.”

Supervisor Jose Medina said he found the results “helpful as we look at the budget decisions we make and the priorities we set.”

The entire survey can be found at rivco.gov/budget.

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