Overview: California Governor Gavin Newsom has proposed a revised budget for 2025-26, which includes $12 billion in budget reductions, including $5 billion to cut Medi-Cal access for undocumented immigrants and $900 million in cuts to IHSS. These cuts would affect vulnerable communities, including those who rely on Medi-Cal and IHSS. Advocates are concerned that the proposed cuts would target marginalized communities and deepen inequality, and would destroy the progress and goals of California’s Master Plan for Aging.
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Community health advocates are alarmed after Gov. Gavin Newsom released a summary of the May Revision to his proposed 2025-26 California state budget.
According to the California Budget & Policy Center, Newsom’s revision aims to close an estimated $7.5 billion deficit for 2025-26 by proposing roughly $12 billion in budget reductions.
“The 2025–26 budget proposal fails to marshal the resources needed to help vulnerable Californians meet basic needs like health care, housing, and food assistance,” stated California Budget & Policy Center Executive Director Chris Hoene. “It also falls short in delivering the bold response needed from California’s leaders amid unprecedented federal threats and economic uncertainty.”
Cuts to Medi-Cal for undocumented residents
One of the most notable cuts to the budget is Medi-Cal access to California’s undocumented residents. In 2024, California became the first state to provide health insurance to undocumented immigrants who were eligible by income.
Now, the governor has proposed $5 billion in cuts to Medi-Cal access, which largely impacts access to care for undocumented populations. According to the budget revision, access to Medi-Cal enrollment for undocumented immigrants, ages 19 and older, would be frozen starting in 2026. Additionally, existing undocumented Medi-Cal beneficiaries would be charged a monthly premium of $100 starting in 2027.
“We are deeply concerned about the Governor’s proposal to cut critical health coverage for California’s undocumented immigrant population,” stated Alicia Emanuel, director of the National Health Law Program’s Eligibility & Enrollment Practice Area, in a statement.
“Immigrants are the backbone of California’s economy. In 2023 alone, undocumented Californians contributed $8 billion in state and local taxes. We recognize the Governor has tough choices to make, but targeting health cuts to immigrant communities goes against the health equity principles California seeks to uphold.”
Cuts to Medi-Cal to community-based mental health programs
Some of the most vulnerable communities in California rely on Medi-Cal and other state-funded health programs, including programs funded under the California Reducing Disparities Project (CRDP), a statewide prevention and early intervention effort to reduce mental health disparities in underserved communities. Launched in 2009, the CRDP piloted several community-based programs that served African American/ Black, Asian Pacific Islander, Latino/ Latinx, LGBTQ+ and Native Americans communities.
Now, these programs may be cut as part of the governor’s revised budget. According to the proposal, all funding for the CRDP would be eliminated, potentially forcing 30 community-based mental health programs to end.
“The proposed elimination of CRDP funding is far more than a budget decision, it’s a direct blow to the mental health and wellness of Black women and other communities of color across California,” stated Sonya Young Aadam, CEO of California Black Women’s Health Project (CABWHP), in an emailed statement. “These communities, long underrepresented and underserved, continue to face deep, systemic mental health disparities.”
Sisters Mentally Mobilized, a program developed by the CABWHP, is one of the programs that receives funding through the CRDP. Sisters Mentally Mobilized trains Black women across California to become mental health advocates and community leaders.
“Marginalized communities’ mental health should never be up for debate. Programs like Sisters Mentally Mobilized (SMM) and the California Reducing Disparities Project (CRDP) are not just services—they are lifelines for communities navigating complex histories of being underserved, unheard, and unseen,” stated Dominique Paxton, Northern California program manager and director of Mental Health Initiatives program (including SMM) at CABWHP.
Paxton and Aadam are calling on California leaders to protect CRDR and the community-focused services these programs provide in order to continue to build equitable communities.
A 2021 survey called “Listening to Black Californians with Mental Health Conditions” reported that of the 3,325 respondents, nearly one in four Black Californians (23%) reported a mental health condition, and nearly one in seven (14%) report that a household member has a mental health condition.
Additionally, the survey found that Black Californians who report mental health conditions are more likely to have Medi-Cal coverage and less likely to have private insurance coverage than those who do not report mental health conditions.
“I know firsthand, as a Black woman diagnosed with BPD, depression and anxiety, how important this program is when traditional systems often neglect us. “Without CRDP funding, this program may not survive,” said Raneisha Stassin, a consultant with the CABWHP, in an email.
Cuts to In-Home Supportive Services
Many of the budget cuts proposed in the revision will impact historically underserved communities in various ways, including those who seek support from In-Home Supportive Services (IHSS), a program that helps older and/ or disabled Californians live in their own homes.
According to the revision, the governor proposed capping provider overtime and travel hours at 50 hours per week beginning July 2025, among other cuts.
Experts at the California Budget & Policy Center stated that these changes “would reduce support for both IHSS recipients and the workers who provide essential in-home care.” In doing so, together these proposals would reduce General Fund spending by an estimated $900 million in 2025-26 and $707.5 million ongoing.
“As President of SEIU Local 2015 and Executive Director of UDW/AFSCME Local 3930 respectively, representing over 700,000 long-term care workers across California, we want to be crystal clear: proposed cuts to In-Home Supportive Services (IHSS) and Medi-Cal are unacceptable, shortsighted, and dangerous,” Arnulfo De La Cruz said in a statement.
“This May Revise [budget revision] sends the wrong message. It targets older adults, those with disabilities, immigrants, long-term care workers (who make up the largest low-wage workforce in the state), and low-income families; it continues to hollow out the middle class and erode trust in government.”
In his statement, De La Cruz noted that the revisions to the state’s budget are at the cost of caregiver’s and at the reward of the rich. He argues doing so “would destroy the progress and the goals of California’s Master Plan for Aging.”
California is poised to see the aging population double in the next decade or so, but lacks the manpower to care for them. Eliminating funding to IHSS could further impact the caregiving workforce.
“The state budget should reflect the values of California’s people, who remain committed to supporting our state’s most vulnerable, including immigrants and people with low incomes,” Hoene stated. “Californians expect state leaders to advance a vision that sharply contrasts with the harmful federal agenda, not cuts that target marginalized communities and deepen inequality.”