Overview
- The forecast hinges on about $42 billion in extra revenue tied to AI‑related stock gains, a view far rosier than the LAO’s roughly $18 billion deficit projection.
- Spending increases include more than $10 billion for education, $4.5 billion for health programs, $2.4 billion in general funds for Medi‑Cal, and a $200 million zero‑emission vehicle rebate plus higher Cal Fire funding.
- Gap‑closing steps include $1.55 billion in state‑operations cuts, elimination of roughly 6,000 long‑vacant jobs for $1.2 billion in savings over two years, and $786 million saved by ending full Medi‑Cal for some legal‑status immigrants.
- Housing and homelessness spending drops by about $1.4 billion, with no new money for the main local homelessness program beyond $500 million that remains available conditionally.
- The blueprint does not detail how to offset recent federal Medi‑Cal and food‑assistance cuts, with as many as 3.4 million Californians potentially losing eligibility as specifics are deferred to negotiations.