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California’s $321 Billion Budget Hinges on Housing Reform Vote

Enactment depends on SB 131 passing by June 30 for housing, infrastructure reforms

FILE - A view of the California State Capitol in Sacramento, Calif., Aug. 5, 2024. (AP Photo/Juliana Yamada, File)
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California Governor Gavin Newsom speaks during a news conference at Gemperle Orchard on April 16, 2025 in Ceres, California. Governor Gavin Newsom and California Attorney General Rob Bonta have filed a lawsuit in federal court challenging the Trump administration's use of emergency powers to enact sweeping tariffs that hurt states, consumers, and businesses.
The California State Capitol. (File photo)

Overview

  • The plan closes a $12 billion shortfall using reserves, special-fund transfers and deferred payments
  • Progressive priorities are scaled back with new Medi-Cal enrollment paused for undocumented adults from 2026, a $30 monthly premium for certain enrollees under 60 starting in 2027 and reductions to mental health, dental and fertility services
  • The budget redirects $1 billion from cap-and-trade to firefighting and omits a guaranteed $1 billion annual allocation for the high-speed rail project
  • It allocates $80 million to implement a voter-approved crime measure, funding behavioral health beds, pre-trial services and court operations
  • A poison-pill provision nullifies the entire spending plan unless SB 131 is enacted by June 30 to advance housing and infrastructure reforms