The Brief

California under Gov. Gavin Newsom has made sweeping changes to its behavioral health system, pouring billions of dollars into new services and support programs.

But the state’s ambitious plans face a looming threat: the proposed federal spending cuts that Congress is currently considering are seen as all but certain to impact Medicaid and could bring to a halt some of the headway the state has made in responding to its behavioral health crisis.

It’s not that all of California’s behavioral health policies are explicitly tied to Medicaid, but many state and local mental health programs draw funding from it. Less Medicaid money means less money for those efforts.

“When you remove resources of this size and scope everything is at risk,” said Alex Briscoe, principal with the nonprofit Public Works Alliance and who previously led the Alameda County Health Care Services Agency. “To be fair, the behavioral health reform landscape of California was just written, and we are still very much moving from promise to practice.

“So it's an extremely difficult time to see such fundamental threats to funding Medicaid,” Briscoe said.

It is unclear what these federal spending cuts will look like, but a budget resolution that passed the House last month proposed $880 billion in reductions over the next 10 years from the committee that oversees Medicaid. Both chambers still need to agree on a joint budget resolution.

Medicaid, the joint state and federal health insurance program for low-income people, pays for the care of four in 10 Californians. It’s through this program, also known as Medi-Cal in the Golden State, that millions can access behavioral health services such as therapy, medication, psychiatric evaluations and crisis support. About two-thirds of California’s $161 billion Medicaid spending comes from the federal government.

It’s also the Medicaid program that helps California pay for some of its social support services for its most vulnerable residents. They include housing navigation and food assistance, which help stabilize people and improve their chances of completing their course of mental health or substance use treatment.

The federal threats to Medicaid funding come at a time when close to half of adults in the state have reported symptoms of anxiety or depression, and about 1.2 million of them live with a serious mental health illness, according to figures by the National Alliance of Mental Illness. When it comes to children, 1 in 6 experience a mental health disorder every year.

Meanwhile, opioid-related deaths skyrocketed between 2018 and 2023, largely because of fentanyl use, state data shows. Opioid overdose deaths peaked at more than 8,000 in 2023 and have been declining since last year.

In response to the grim landscape, Newsom set out to revamp the state’s behavioral health system. This has included growing the number of treatment beds, training new mental health workers, expanding the reach of crisis hotlines and mobile crisis services, increasing the availability of opioid overdose reversal medication, and increasing mental health access in schools, among other changes.

Tents outside the Federal Courthouse in Los Angeles on April 22, 2024.

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Ted Soqui

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CalMatters

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The state pulls from multiple buckets, such as special taxes, to fund its public behavioral health system, but federal funding through Medicaid is an essential piece of it. Across the country, Medicaid is the largest payer for mental health services.

CalMatters asked the governor’s office what Medicaid cuts could mean for the state’s behavioral health system. It released a written statement from Health Secretary Kim Johnson in which she reiterated that the administration had an “unwavering” commitment to ensure that all Californians have access to mental health and substance use disorder treatment.

“Behavioral health care is essential health care for the well-being of individuals, families, and communities across California,” she said. “Investing in behavioral health services saves lives, reduces long-term costs, and strengthens our workforce and economy.”

But mental health advocates, health plans, and county officials put it this way: Medicaid funding cuts would result in more sick people going without treatment. That would increase the likelihood of them losing employment or dropping out of school and ending up in need of more acute care, or worse, on the street.

“There are tons of people on the streets who are struggling,” said Corey Hashida, a senior research associate at the Steinberg Institute, a mental health advocacy organization. “At a time when we're trying to move forward with doing these big things to help those folks, all this uncertainty and chaos is swirling around federal cooperation … it just infuses a little fear into the safety net.”

In a recent policy brief, Hashida explained that in addition to possible funding cuts to Medicaid, key federal behavioral health grants are also at risk. And California has already started to see some of this fallout. On March 24, the California Department of Health Care Services, which oversees the state’s Medicaid program, received termination letters from the federal Substance Abuse Mental Health Services Administration, pulling back $120 million in behavioral health grants.

Those grants, according to the department, were intended for initiatives at the state and local level, including work to reduce overdose deaths and expand access to medications for opioid use disorder.

California could lose billions in Medicaid funding

The feds could roll back Medicaid spending in a number of ways, such as imposing work requirements or restructuring funding formulas. They could also restrict how Medicaid funds are used by ending federal waivers that expanded how California and other states use money from the program.

Policy and budget experts say that it is difficult for states to make contingency plans when it is unclear how or if the cuts will play out.

President Donald Trump has said that he will not touch Medicare and Medicaid as he looks for spending reductions to fund extending his 2017 tax cuts. He has said he will only go after eliminating fraud in the programs. However, the Congressional Budget Office has found that if cuts to Medicare, the insurance program for seniors, are off the table, then Congress would have to make deep cuts to Medicaid to reach House Republicans’ savings goal.

By some estimates, Republican proposals to reduce spending in Medicaid could translate into an annual loss of $10 billion to $20 billion in federal funds for California.

For example, Congress may choose to reduce the matching dollars that the federal government pays states for adults who gained coverage under the Affordable Care Act’s Medicaid expansion. The federal government pays California 90% of the cost for this expansion population — that’s more than the 50% matching rate the feds pay the state for other enrollees.

This expansion allowed many childless adults to access critical mental health treatment, including many struggling with psychosis, said Michelle Doty Cabrera, executive director of the County Behavioral Health Directors Association. Psychosis is a condition that can result in hallucinations. It typically emerges in late adolescence or early adulthood, but can be treated with medication and therapy.

That expansion “was a game changer,” Doty Cabrera said. “Taking away funding for that population would be devastating.”

Counties are responsible for providing specialty mental health services to people with more serious mental health conditions and substance use disorders. Counties fund these services with their own local revenue, some state dollars and matching federal Medicaid funds.

“There's really nowhere else to go in terms of funding,” Doty Cabrera said. “We're already maximizing local spending to try to support these services, and if the federal funding were taken away, it would just put additional pressure on the state budget that obviously is already facing a tremendous number of pressures.”

Federal Medicaid dollars are a significant portion of counties’ mental health budgets. In Los Angeles County, for example, 30% of the county’s annual budget for its behavioral health services department comes from Medicaid, according to the department. In Santa Clara County, about a quarter of it does.

“So when you're talking about a quarter of the funding for a system, you're talking about the ability of the entire system to function,” said James Williams, county executive for Santa Clara County.

Will Trump extend California health waivers?

California relies on special permission, or “waivers” from the federal government to be able to use Medicaid dollars to fund non-traditional services, such as access to a care coordinator, housing navigation, rental deposit aid, and medically tailored meals. Experts say these types of support services go hand-in-hand with successful behavioral health care, and in the long run should save the state and feds’ money by helping people avoid costly emergency room care.

“Waivers are about granting some flexibility so that you can deliver more holistic services,” Williams in Santa Clara County said. “And one of the biggest challenges in behavioral health care, and this is especially true for substance use care, is having people make it through a course of treatment.” To increase people’s chances, you need things such as stable housing.

Some of these support services are just now starting to reach people. But their continuation is also in the feds’ hands. The federal government has the power to rescind the waivers or let them expire.

Two waiver programs are seen as key to California’s behavioral health transformation because they extend Medicaid funding and flexibilities for these support services. These are BH-Connect, which was just approved by the Biden-Harris administration in December, and CalAIM, for which federal approval is set to expire at the end of 2026.

The Trump administration has not indicated whether it will renew the CalAIM permissions, but given the discussion of Medicaid funding cuts, it is creating some anxiety over the future of the program.

Michael Schrader, chief executive of the Central California Alliance for Health, the local Medicaid plan for people in Merced, Santa Cruz and neighboring counties, said he has been hearing concerns about this from providers in his network.

“Providers are wondering, ‘Do we keep making investments in CalAIM?’” Schrader said.

“I’ve got clinics saying, ‘I did what you asked me to do. I stepped up and I hired community health workers, I hired enhanced care managers, I put together structured programs, we're serving these people, and I continue to make these investments thinking this is long term, and now I don't know.’”

Supported by the California Health Care Foundation (CHCF), which works to ensure that people have access to the care they need, when they need it, at a price they can afford. Visit www.chcf.org to learn more.

This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.

This story first appeared on The LA Local.

Since 1977, Richard Santillan has been to every Opening Day game at Dodger Stadium. 

“The tradition goes from my father, to me, to my children and grandchildren. Some of my best memories are with my father and children here at Dodger Stadium,” Santillan told The LA Local, smiling under the shade of palm trees near the entrance to the ballpark Wednesday morning. He was there to protest the team less than 24 hours before Opening Day.

Santillan, like countless other loyal Dodgers fans, is grappling with his fan identity over the team’s decision to accept an invitation to the White House and owner Mark Walter’s ties to ICE detention facilities.

More than 30 people joined Santillan on Wednesday morning for a press conference held near 1000 Vin Scully Drive to convey a message directly to the team. 

“We are demanding the Dodgers stop participating in funding of inhumane treatment of families and do not go to the White House to celebrate with the criminal in chief,” Evelyn Escatiola told the crowd. “Together, we have the power to make a change.”

Escatiola, a former dean of East Los Angeles College and longtime community organizer, urged fans to flex their economic power by “letting the Dodgers know that we do not support repression.”

Jorge “Coqui” Rodriguez, a lifelong Dodgers fan, spoke to the crowd and called on Dodgers ownership to divest from immigration detention centers owned and operated by GEO Group and CoreCivic.

Jorge Coqui H Rodriguez speaks at a press conference outside Dodger Stadium on March 25, 2026, to demand the Dodgers not to visit the White House following their 2025 World Series win.

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J.W. Hendricks

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The LA Local

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In a phone interview a day before the protest, Rodriguez told The LA Local he did not want the Dodgers using his “cheve” or beer money to fund detention centers. 

“They can’t take our parking money, our cacahuate money, our cheve money, our Dodger Dog money and invest those funds into corporations that are imprisoning people. It’s wrong,” Rodriguez said. 

Rodriguez considers the Dodgers one of the most racially diverse teams and said the players need to support fans at a time when heightened immigration enforcement has become more common across L.A.

The team’s 2025’s visit to the White House drew ire from the largely Latino fan base, citing the Trump administration’s ongoing attacks on immigrants. 

In June, the team came under further scrutiny when rumors swirled online that federal immigration agents were using the stadium’s parking, which immigration authorities later denied in statements posted on social media accounts.

The team again came under fire after not releasing a statement on the impacts of ICE raids on its mostly Latino fan base at the height of immigration enforcement last summer. The team later agreed to invest $1 million to support families affected by immigration enforcement.

When he learned the Dodgers were pledging only $1 million to families in need, Rodriguez called the amount a  “slap in the face.” 

“These guys just bought the Lakers for billions of dollars and they give a million dollars to fight for legal services? That’s a joke,” Rodriguez said. “They need to have a moral backbone and not be investing in those companies.”

According to reporting from the Los Angeles Times, former Dodgers pitcher Clayton Kershawsaid last week that he is looking forward to the trip.

“I went when President [Joe] Biden was in office. I’m going to go when President [Donald] Trump is in office,” Kershaw said. “To me, it’s just about getting to go to the White House. You don’t get that opportunity every day, so I’m excited to go.”

The Dodgers have yet to announce when their planned visit will take place. 

Santillan sometimes laments his decision to give up his season tickets in protest of the team. His connection to the stadium and the memories he has made there with family and friends will last a lifetime, he said. On Thursday, he will uphold his tradition and be there for the first pitch of the season, but with a heavy heart.

“It’s a family tradition, but the Dodgers have a lot of work to do,” he said.

A local favorite mom-and-pop bookshop in Eagle Rock is facing displacement due to a steep rent hike. The owners say theirs is just one of several small businesses along Eagle Rock Boulevard struggling to keep up with lease increases.

Over the past 19 years, many in the neighborhood have come to love READ Books for its eclectic collection of used titles and shop dog Florence.

Co-owner Jeremy Kaplan said it’s been a delight to grow with the community over the years.

“Like seeing kids come back in, who were in grade school and now they’re in college,” Kaplan said.

But the building where Kaplan and wife Debbie rent was recently sold, and the rent increased by more than 130% to $2,805 a month, Kaplan said. He told LAist it was an increase his small business simply could not absorb.

Kaplan said he originally was given 30 days notice of the rent increase. After some research, assistance from Councilmember Ysabel Jurado’s office and some pro-bono legal help, Kaplan said he pushed back and got the 90-day notice he’s afforded by state law.

California Senate Bill 1103 requires landlords to give businesses with five or less employees 90 days’ notice for rent increases exceeding 10%, among other protections.

Systems Real Estate, the property management company, did not immediately respond to LAist’s request for comment.

What can small businesses do? 

Nadia Segura, directing attorney of the Small Business Program at pro bono legal aid non-profit Bet Tzedek said California law does not currently allow for rent control for commercial tenancies.

Outside of the protections under SB 1103, Segura said small businesses like READ Books don’t have much other recourse. And even then, commercial landlords are not required to inform their tenants of their protections under the law.

“There’s still a lot of people that don’t know about SB 1103. And then it’s very sad that they tell them they have these rent increases and within a month they have to leave,” Segura said.

She said her group is seeing steep rent hikes like this for commercial tenants across the city.

“We are seeing this even more with the World Cup coming up, the Olympics coming up. And I will say it was very sad to see that also after the wildfires,” Segura said.

Part of Bet Tzedek’s ongoing work is to advocate for small businesses, working with landlords who are increasing rents to see if they are willing to give business owners longer leases that lock in rents.

What’s next 

After READ Books posted about their situation on social media, commenters chimed in to express their outrage and love for the little shop.

While he looks for a new spot, Kaplan says he’s forming a coalition of local businesses and activist groups to see what can be done to help other small businesses facing similar displacement. He wants to address the displacement issue for businesses like his, which have made Eagle Rock the distinctive neighborhood that it is today.

Owl Talk, a longtime Eagle Rock staple selling clothing and accessories in a unit in the same building as READ Books, is facing a “more than double” rent increase, according to a post on their Instagram account.

Kaplan said he’s been in touch with the office of state Assemblywoman Jessica Caloza and wants to explore the possibility of introducing legislation to set up protections for small businesses like his, including rent-control measures or a vacancy tax for landlords. Kaplan said he also reached out to the office of state Sen. Maria Durazo.

By his count, Kaplan said there are about a dozen businesses within surrounding blocks that are at risk of closing their doors or have shuttered due to rent increases or other struggles.

When READ Books was founded during the Great Recession, Kaplan said he knew it was a longshot to open a bookstore at the same time so many were struggling to stay in business.

“It was kind of interesting to be doing something that neighborhoods needed. That was important to me growing up, that was important to my children, that was important to my wife growing up,” Kaplan said.

“And then somebody comes in and says, ‘We’re gonna over double your rent.”

Topline:

Frozen budget: Most of the city’s Bureau of Street Lighting budget comes from an assessment that people who own property illuminated by lights pay on their county property tax bill. The amount people pay depends on the kind of property they own and how much they benefit from lighting. A typical single-family home currently pays $53 annually, and in total, the assessments bring in about $45 million annually for the city to repair and maintain streetlights. Changing the amount the Bureau of Street Lighting gets from the assessment requires a vote among property owners who benefit from the lights.

Ballots: L.A. City Council’s vote gives city staff the green light to prepare and send out those ballots. Miguel Sangalang, who oversees the bureau, said at a committee meeting earlier this month that he expects to send out ballots by April 17. Notices about the ballots will be sent out prior to the ballots themselves.

Near unanimous vote: L.A. City Councilmember Monica Rodriguez was the only “No” vote Tuesday, saying she wanted to see a more current strategic plan for the bureau. Sangalang said the bureau developed a plan in 2022 that lays out how money will be spent. Councilmember Imelda Padilla was absent for the vote.

Vote count: Votes will be weighted according to the assessment amount. Basically, the more you’re asked to pay yearly to maintain streetlights, the more your vote will count. Ballots received before June 2 will be tabulated by the L.A. City Clerk.

How much more money: According to a report, the amount needed in assessments from property owners to meet the repair and maintenance needs of the city’s streetlighting in the next fiscal year is nearly $112 million.

Use of the money: Sangalang said at a March 11 committee meeting that the extra funds would be used to double the number of staff to handle repairs and procure solar streetlights, which don’t face the threat of copper wire theft. That would all potentially reduce the time it takes to repair simple fixes down to a week. Currently, city residents wait for months to see broken streetlights repaired. The assessment would come with a three-year auditing mechanism.