The Brief

California voters told lawmakers last fall that they wanted doctors to get paid more to see low-income patients. But officials for the Newsom administration blew past a federal deadline to make that happen through Medi-Cal on Monday, effectively leaving millions of dollars unclaimed.

The unclaimed money is tied to Proposition 35, a ballot measure passed by 68% of voters in November. The measure committed money from a special tax on health insurance plans to increase payments to doctors and healthcare facilities that treat low-income patients in Medi-Cal, the state’s Medicaid program.

But first the state had to submit papers to the federal government for approval. That deadline was March 31.

Missing the deadline means that, for the first quarter of the year, doctors will not get the rate increases promised by the ballot measure. It also means that California will lose federal matching dollars intended to boost the Medi-Cal program during that time period.

The Department of Health Care Services, the agency that oversees Medi-Cal and the implementation of Proposition 35 did not respond by publication deadline to questions from CalMatters about why the state missed the deadline.

In recent legislative hearings, Health Care Services Director Michelle Baass stated that California’s federal application was delayed by unfilled appointments on the advisory committee established by the ballot measure to oversee spending.

Enough of those appointments were filled for the committee to legally meet, but there is still one outstanding appointment. Gov. Gavin Newsom’s office refused to respond to questions about why the appointment has not been made. The committee is set to meet for the first time April 14.

During a February hearing, another official for the healthcare services department said the agency never believed it would be feasible for the state to meet the March deadline.

The slow implementation is frustrating lawmakers and clinicians alike who say rate hikes are long overdue and necessary to increase access for Medi-Cal recipients.

Assemblymember Dawn Addis, a Democrat from Morro Bay, said in a recent hearing that Prop. 35 was “widely popular” and she had supported it with the hope that rate increases would begin quickly.

Lawmakers have aggressively expanded Medi-Cal benefits and eligibility in the past 10 years. Today, one in three Californians get healthcare through the state program. But doctors say the amount they get paid to see Medi-Cal patients hasn't increased in two decades.

Addis said during the hearing that “94% of Californians now have healthcare coverage, but so many folks can't access providers. And what people in rural areas will point to is that providers just simply cannot afford to practice in rural areas because the reimbursement is so low.”

In a separate legislative hearing, Sen. Akilah Weber Pierson noted that even with the unfilled position, the advisory committee has a quorum and could have met to discuss Proposition 35 implementation.

“This was something the voters were very, very clear about. ... I don’t think the residents would like for us to delay,” said Weber Pierson, a Democrat and obstetrician from San Diego. “It is extremely unfortunate that we will not be able to meet that first deadline and that we are just leaving funds on the table.”

Medi-Cal shortfall as costs increase

The missed deadline comes at a time when California is confronting other Medi-Cal challenges. The state is bracing for potential federal funding cuts that are tied to budget agreements moving through Congress.

And, the state program faces its own shortfall.

Newsom and the Department of Health Care Services are under increased scrutiny for requesting a $6 billion state loan to carry out Medi-Cal operations through the end of the year.

State Republican lawmakers were quick to pin the blame on Newsom’s expansion of Medi-Cal access to all income-eligible immigrants who don’t have permanent legal status.

The administration defended the expansion and pointed to other cost drivers such as increasing pharmacy costs and growing senior enrollment, but acknowledged that about half of the money from the deficit is from the immigrant expansion.

Newsom also blamed the Medi-Cal deficit partially on Proposition 35 in an interview with reporters earlier this month.

“Prop. 35 placed a lot of cost burdens as it relates to rates and so all those things have to be factored in. The voters chose that path with Prop. 35, and we were clear, had strong opinions about it. The cost of [Prop. 35[ would increase the cost of Medicaid, and that’s happening,” Newsom said.

Healthcare industry backed Proposition 35

Before the election, Newsom stopped short of opposing the measure but said Proposition 35’s passage would limit the Legislature’s ability to address future state budget deficits because it committed the money to a specific use.

The measure was backed by nearly the entire healthcare industry, including doctors, hospitals, clinics and ambulance companies. Those groups supported the measure in part because Newsom and past governors had previously reneged on promises to increase Medi-Cal payments and instead used the healthcare tax money to support general government expenses.

The proposition allocates $2 billion annually for 2025 and 2026 to the state general fund while reserving roughly another $2 billion for rate increases and other investments providers want.

Stuart Thompson, a lobbyist for the California Medical Association, which supported the measure, advocated at a March legislative hearing for the Proposition 35 committee to meet as soon as possible. Thompson noted that some payment increases that were approved separately by the Legislature in 2023 have still not been implemented and that the state needs to work to keep the ballot measure on track.

“We really want to get our bang for the buck and make sure that the way that Prop. 35 is implemented really enhances the care for the most needed here in California,” Thompson said.

CalMatters reporter Alexei Koseff contributed to this story.

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.

As federal officials suspend funding to L.A.’s main homelessness agency — citing mismanagement — a recent audit found the agency did not spend tens of millions of dollars allocated to it.

The audit found the L.A. Homeless Services Authority (LAHSA) underspent its overall budget by $108 million in the last fiscal year ending in June 2025, mainly because of “program delays.” The year before, the underspend was nearly $150 million. Some of it was carried forward to future years, auditors wrote.

Specifically to federal dollars, the audit shows LAHSA spent at least $7 million less than it had budgeted last fiscal year. LAHSA had budgeted $61.5 million in such dollars. It spent only about $49 million to $54.4 million, per the audit.

Underspending at LAHSA was called out more than four years ago, in a January 2022 audit that found the agency left $3.5 million in federal grants on the table by not using them.

A spokesperson for LAHSA has not responded to a request for comment.

LAHSA is governed by a 10-member commission that is half appointed by L.A. Mayor Karen Bass, and half appointed by each of the five county supervisors. Bass has served on the commission since she appointed herself to it in fall 2023.

Bass’ office said in a statement that the mayor “has grave concerns about LAHSA and zero tolerance for mismanagement and negligence.” The federal money suspension puts lives and progress on homelessness at risk, the statement added.

The mayor’s office statement says the mayor “previously directed the city to evaluate how to move away from the agency.”

When the City Council considered in March whether to withdraw the city’s funds from LAHSA and instead have the city directly oversee the dollars, Bass cautioned that the city first would need “a serious, thoughtful transition plan,” adding that “the last thing we need is a new department and more bureaucracy.”

Spokespeople for the county supervisors have not returned messages for comment on the underspending.

City of L.A. also underspends

The city of L.A. also has been underspending its homelessness budget — to the tune of $513 million in Bass’ first full fiscal year as mayor that ended June 2024, according to an analysis later that year by City Controller Kenneth Mejia’s office.

Federal officials cited that in their letter Thursday as one of many reasons for their suspension of funds to LAHSA. The letter incorrectly attributed the full underspend to LAHSA. The findings were instead about the city’s overall homelessness spending, a portion of which goes to LAHSA.

Spokespeople for HUD have not responded to an emailed request about the inaccuracy.

A controller’s analysis for the following fiscal year, ending June 2025, found the city again underspent its homelessness budget, by at least $473 million.

“Breaking City Hall from its decades old dysfunctional system is how we finally brought homelessness down by 17%,” Bass said in a statement at the time. “I’m glad to support the controller’s recommendations to further reform the status quo.”

Other problems found in audit

The federally required audit, known as a single audit, must be done each year by an accounting firm hired by LAHSA.

The latest one, finalized last month and covering the fiscal year that ended last June, found failures surrounding poor bookkeeping and accounting of taxpayer money at the agency — which spent over $800 million in public funds last fiscal year.

The agency’s financial statements initially included “significant” inaccurate amounts that needed to be adjusted late in the audit process, the auditors found.

It found the inaccuracies stemmed from a "significant deficiency” in LAHSA’s “internal controls,” which are supposed to safeguard against financial inaccuracies and fraud.

Vacant tax-funded apartments

LAist reported Thursday that LAHSA has been using tax dollars to pay for more than 250 empty apartments as part of an initiative Mayor Karen Bass introduced years ago to make housing readily available to unhoused people. That’s just over a third of the units in the strategy, known as master leasing, according to an LAist review of official data.

The vacancies have been tying up tax dollars — largely overseen by the county — that could house hundreds of people in other approaches, according to official financial data.

Other funds leaving LAHSA

In response to previous audits that found major problems with LAHSA’s oversight of tax dollars, county supervisors decided last spring to withdraw all of the county’s $300 million-plus in annual funding of services through LAHSA and instead have the county directly manage it starting July 1.

Problems identified in the latest audit reiterate why the county pulled its funding, Supervisor Kathryn Barger said in a statement Monday.

The city is considering moving in a similar direction as the county. A key City Council panel — its homelessness committee — recently recommended the full council start shifting city homelessness funding out of LAHSA over the course of the next fiscal year. Bass urged caution, saying moving too quickly to shift funding could disrupt services for unhoused people.

LAHSA has long functioned as the L.A.’s homeless services department, with over $300 million in city money expected to flow through LAHSA this fiscal year.

A cookie business with well over a dozen flavors ranging from Mexican hot chocolate to mango sticky rice? How very L.A.! Lei’d Cookies started as a pandemic pop-up. Nowadays, you'll find them in the Culver City Arts District.

About the owner

Baker and owner Leilani Terris posing, holding two cookies from Lei’d Cookies.

(

Courtesy Leilani Terris

)

Co-owner Leilani Terris originally thought she'd become a physical therapist. After applying to school, she took a gap year, taught herself to bake and connected with co-owner James Lewis to start their cookie business.

Terris sat down with Austin Cross, who hosts AirTalk every Friday, to explain how their cookies take customers on a bite-sized journey to other countries.

What's the best way to experience Lei'd Cookies?

Add ice cream to a warm cookie at their Culver City shop. If you want a more communal experience, take a trip with a group of friends to Smorgasburg L.A., which takes place every Sunday in downtown L.A.

Known for international flavors

Terris wants customers to get a taste of other cultures. Lei'd Cookies has put a spin on ghriba, a type of shortbread cookie from Morocco, and spicy Mexican hot chocolate.

Bakery details

• Although Terris didn't start with professional culinary experience, her co-owner, James Lewis, worked in restaurant management for years prior to opening.
• They joined Smorgasburg L.A.'s list of vendors in 2021.
• Lei'd Cookies opened its brick-and-mortar in Culver City in 2023.

Cookies we tried

• Orange Date Blossom Cookie (Ghriba inspired and includes apricot jam and walnuts)
• Mayan (cinnamon, cayenne, and chocolate from Tabasco, Mexico)
• Mango Sticky Rice
• Guava and Goat Cheese (their best-seller)

What should we try next?

Southern Californians could face floods and fires this year.

A hot, dry winter has led to fires already, and experts said Friday at a news conference in Los Angeles that that is projected to continue.

Different from previous wildfire seasons, though, experts are also closely watching El Niño, a powerful weather pattern that causes changes in winds and ocean temperatures.

“California is faced with multiple disasters, whether it be fires, floods, hazardous material incidents,” said Brian Marshall, fire and rescue chief with the California Office of Emergency Services. Marshall said the El Niño “could impact fires and could impact flooding across the state.”

The National Weather Service is predicting a 63% chance of a “very strong” El Niño from November to January. It could be one of the most powerful since 1950, according to the weather service’s Climate Prediction Center.

Heavy El Niño storms could trigger flash flooding and debris flows in wildfire burn scar areas.

The effects of the rapidly developing El Niño on this year’s wildfire season remain uncertain, and experts urged residents to stay vigilant.

“Even very strong El Niño events do not lead to the expected impact everywhere,” according to the Climate Prediction Center.

William Deverell, director of the Huntington-USC Institute on California and the West, said more rain can also increase plant growth, which can eventually dry out and create more fuel for fires.

Robert Garcia, fire chief in the Angeles National Forest, said the recent Burro Fire provided “some indicators of what may be ahead” as vegetation starts to dry. The Burro Fire charred 30 acres and burned for about a week in May in the San Gabriel Mountains north of Glendora.

What you can do to stay safe

Fire officials advised people to create defensible space around their homes by clearing it of dry vegetation and other flammable materials.

Pre-fire conditions, including the abundance of dry vegetation, were “dominant drivers” of burn severity in the Eaton, Palisades and Hughes fires in January 2025, according to a new study led by San Diego State University in collaboration with NASA Jet Propulsion Laboratory researchers.

“Regions like Los Angeles … have a lot of human populations who are living closer to these environments that are susceptible to wildfires,” said Madeleine Pascolini-Campbell, a scientist at JPL and a co-author of the study.

Beyond fire prevention, defensible space also helps firefighters enter properties to extinguish flames.

“Wind-driven, ember-casting wildfires moving through a community without defensible space makes it very difficult for us to be able to combat those fires,” Los Angeles Fire Chief Jaime E. Moore said at the news conference. “It makes it unsafe for our firefighters and those that are working hard to protect your home.”

Los Angeles Unified has renamed two campuses previously named for Cesar Chavez. The move follows a New York Times investigation that found the famed labor leader sexually abused girls and women.

The board voted to rename the schools Friday following town hall meetings and a vote among staff, students and parents at each campus.

Cesar Chavez Learning Academies in San Fernando is now Arroyo High School, and Cesar Chavez Elementary School is now Oakland Street Elementary School.

How did the change come together?

A March New York Times investigation found survivors of Chavez’s abuse included United Farm Workers co-founder Dolores Huerta. The LAUSD Board voted unanimously a week later to begin a renaming process for the two campuses after a consultation with the schools’ communities.

With one exception, none of the other prospective names were associated with specific people.

Arroyo High School

Previously called: Cesar E. Chavez Learning Academy

Other names considered:

• Valley High School
• Rudy Acuña High School (Rodolfo "Rudy" Acuña is a Chicano studies scholar who died earlier this year at age 93.)

The vote: Arroyo High earned 557 of 1,063 votes, and was the most popular choice among each of students, parents and staff. It’s based on the street where the school is located. (“Arroyo” is Spanish for “creek.”)

Oakland Street Elementary School

Previously called: Cesar Chavez Elementary School

Other names considered: 

• Eagles Elementary
• Arroyo Elementary

The vote: Oakland Street Elementary received 211 out of 314 votes, and was the favorite among each of students, parents and staff.

What's next?

The district has designated $209,000 for renovations associated with the name changes, including changing signs and marquees.

The single largest cost is refurbishing the high school’s hardwood gym floor, which will cost an estimated $120,000. Other significant costs include removing and replacing metal lettering on the front of the high school for $25,000, as well as removing and replacing crash pads and banners in the gym for $30,000.

Have other thoughts on school names?

Senior editor Ross Brenneman contributed to this story.