The Brief

California budget is $12 billion in the red amid Trump tariffs and rising costsBy Alexei Koseff, CalMatters

Gov. Gavin Newsom addresses the media during a press conference unveiling his revised 2025-26 budget proposal at the Capitol Annex Swing Space in Sacramento on May 13, 2025. Photo by Fred Greaves for CalMatters This story was originally published by CalMatters. Sign up for their newsletters.

Gov. Gavin Newsom today announced that California is facing a $12 billion budget deficit, spurred by soaring costs for social services as the state’s economy teeters from President Donald Trump’s chaotic tariffs strategy.

Unveiling his revised $322 billion spending plan, Newsom repeatedly blamed the tariffs for undermining key industries and eroding financial markets that are crucial to California’s fiscal health — a “Trump slump” that he forecasts will reduce tax revenues by $16 billion next year.

“California is under assault, the United States of America in many respects is under assault, because we have a president that’s been reckless in terms of assaulting those growth engines and has created a climate of deep uncertainty,” Newsom said. “The impacts are being felt disproportionately in the fourth-largest economy in the world.”

But the size of Newsom’s budget proposal remains virtually unchanged from an earlier version in January, when the governor projected a modest surplus, underscoring that runaway expenses for subsidized health care and other state programs are the biggest long-term challenges.

Newsom is proposing to close the deficit by rolling back state-funded insurance coverage for adults without legal immigration status, cutting coverage for weight loss drugs like Ozempic and reducing home health services, as well as sweeping billions of dollars out of speciality funds to backfill core services.

“We’ve got a spending problem,” Newsom acknowledged, defending the potential cuts against anticipated blowback. “We can deny that we have a shortfall. We can deny that we have a deficit. We can deny we have a problem in the system and we could put it off and be irresponsible.”

His approach will force hard conversations about priorities with the state Legislature as they race to reach a budget deal before the start of the fiscal year in July. Senate President Pro Tem Mike McGuire of Santa Rosa and Senate Budget Chairperson Scott Wiener of San Francisco, both Democrats, gave only a tepid initial response, saying in a joint statement that they “remain focused and prepared to protect the people and progress we’ve made over the years.”

Gov. Gavin Newsom addresses the media during a press conference unveiling his revised 2025-26 budget proposal at the Capitol Annex Swing Space in Sacramento on May 13, 2025. Photo by Fred Greaves for CalMatters California’s financial picture was troubled even before the recent turmoil. Newsom and the Legislature took extraordinary steps last summer to close a budget gap projected in the tens of billions of dollars over two years, including more than $28 billion in 2025-26.

The $12 billion deficit in Newsom’s revised budget proposal represents an additional shortfall after state officials agreed last year to sweeping cuts to state agencies and positions, clawing back funding increases for health care providers, eliminating affordable housing programs, delaying money for schools, suspending business tax credits and dipping into reserves.

Newsom seeks major cuts to Medi-Cal

Medi-Cal, the state’s health insurance program for low-income people, has reported a more than $6 billion cost overrun this year — in part because an expansion to include immigrants without legal status brought in more new enrollees than expected — and it needed an emergency cash infusion in March.

That program is targeted for major reductions in Newsom’s budget proposal: a freeze on new enrollment of adults who are in the country illegally, as well as a $100 monthly premium and cuts to long-term care and dental benefits for those who maintain their coverage. The governor estimates those moves could eventually save more than $6 billion annually.

The governor is also proposing to undo a recent rule eliminating asset tests for seniors, a factor that state analysts found has contributed to a 40% growth in senior Medi-Cal enrollment over the past four years.

His plan would borrow billions of dollars from a special fund intended to raise reimbursement rates for Medi-Cal providers and shift more than $1.5 billion out of a fund intended for projects to reduce greenhouse gases to pay for the state’s firefighting operations.

Newsom is also looking to save money by closing another state prison, a cut made possible because California’s incarcerated population has declined by nearly half, to 91,000 people, in the past two decades. It would be the fifth state prison to close during his administration, though Newsom did not specify which one.

The devastating fires that hit Los Angeles in January have introduced new uncertainty for the budget, because the tax deadline for Los Angeles County — where a quarter of all Californians live — was delayed until October.

But the most significant risk to tax receipts is undoubtedly from Trump’s tariffs, which Newsom sued last month to block. Stock market declines are poised to take a bite out of future income tax revenue, because California relies disproportionately on capital gains earned by the wealthiest taxpayers; that accounts for $10 billion of the projected revenue decline. Higher costs from the tariffs are also imperiling major sectors such as manufacturing, agriculture, tourism and shipping in California, whose largest trading partner is China.

Assembly Republican Leader James Gallagher of Chico called Newsom pinning California’s latest budget woes on the tariffs “the biggest load of crap I’ve ever seen from a politician.” Gallagher said in a statement, “We’re in this mess because of his reckless spending, false promises, and failed leadership.”

Next step: Negotiating with lawmakers

Bargaining with legislative leaders will ramp up over the next month, with a June 15 deadline for the Legislature to pass a balanced budget or forgo its pay, though sometimes provisions of an overall deal drag out beyond that.

“Anyone who thinks we’re not going to make cuts this year is not in touch with reality,” Assemblymember Jesse Gabriel, an Encino Democrat who leads the Assembly budget committee, told CalMatters. “Advocates who are proposing major expansions of programs should stop wasting people’s time.”

California’s public universities, however, saw a rosier forecast in the budget announcement — cuts of 3%, far below the initial 7.95% cuts Newsom proposed in January. Lawmakers this year rallied to spare the University of California and California State University from the original, deeper cuts.

That still means $130 million less for UC and $144 million less for CSU, which is particularly reliant on state funding and says it faces larger class sizes, fewer course options and likely layoffs as a result.

Another spending proposal was spared: a $420 million annual increase of California’s film and television tax credit, more than doubling the pot of available subsidies and boosting the amount that individual productions can receive. It’s a priority for Newsom, with the strong backing of many Los Angeles-area legislators, especially as the region seeks a comeback after the fires.

“I want to get the economy moving again,” Newsom said. “Revenue doesn’t come from trees, it doesn’t come from printing presses.”

Trump’s effort to slash federal spending is another looming question mark. Congressional Republicans have floated shifting more of the cost of social safety net programs to the states, though they are struggling to reach a budget agreement.

If they ultimately push through major changes to federal funding, lawmakers could be back in Sacramento later this year or early next year revising the state budget once again.

“Ninety percent of the ball game is in Washington,” Gabriel said. “It’s frustrating to me that this is beyond our control.”

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

The restaurant:

Detroit-style pizza is hard to find in Southern California, given how far away it is from the Motor City.

Angelenos can consider themselves fortunate though to have a spot tucked in West Hollywood — DTown Pizzeria. The pizzeria is owned by Ryan Ososky, the 2025 Pizza Maker of the Year at the International Pizza Expo. He's received numerous honors for his pan pizzas.

The food: 

Oskosky's been all over the map during his time as a chef, and he's worked under the likes of Michael Mina, Charlie Palmer and Wolfgang Puck. After gaining all that experience, he’d eventually start a pizza pop-up in West Hollywood.

“I’m a chef by trade, but I guess I just happen to own a pizzeria and won some awards around it,” Ososky said.

What Austin tried:

• Goomba
• "Haole" aka not Hawaiian
• The 313
• The 1946 cheese

The verdict:

“Excellent puff of flavor in the middle of an excellent pizza, soft crust,” Austin said after trying the pepperoni-topped Goomba slice.

When taking a bite of the 313, Austin said “the pesto on top of this zings it up,” adding, “It stays moist … but it’s got a moist and crisp with soft dough.”

Listen:

Los Angeles Angels legend Garret Anderson has died. The team announced his death today on social media.

The cause and location of his death were not immediately announced.

"Garret was a cornerstone of our organization throughout his 15 seasons," owner Arte Moreno said in a statement, "and his stoic presence in the outfield and our clubhouse elevated the Angels into an era of continued success, highlighted by the 2002 World Series championship."

Anderson's story is a Southern California one in so many ways. He was born in Los Angeles and graduated from Kennedy High School in Granada Hills, where he was a three-sport star in baseball, basketball and football. He won All-Los Angeles City and All-League Honors as a junior and helped lead Kennedy's basketball team to an L.A. City Championship.

The Angels drafted him out of high school in 1990, and he made his Major League debut in 1994.

He spent all but two of his 17 Major League seasons with the Halos and was a key player on the 2002 team that won the franchise's first, and still only, World Series.

After the Angels decided not to renew his contract at the end of the 2008 season, Anderson signed with the Atlanta Braves in 2009 before returning to SoCal in 2010, this time as a member of the Dodgers. He spent a single season there before retiring in 2011.

He leads the Angels all-time in a slew of statistics, including games played (2,013), hits (2,368), RBIs (1,292), doubles (489) and several others. He was a three-time All-Star, the 2003 Home Run Derby winner and All-Star Game Most Valuable Player.

But Angels fans will probably remember him best for his go-ahead, three-run double in Game 7 of the 2002 World Series. It gave the Angels a 4-1 lead, which they never surrendered.

But despite all the accolades, one of the most impressive stats from Anderson's career was his reliability. He had a stretch of eight seasons where he appeared in at least 150 games and played in at least 140 games in 11 of his 17 seasons in the pros.

Shortly after he retired, he joined the Angels television broadcast team to provide pregame and postgame analysis.

The Angels will wear a special "GA" memorial patch on their uniforms for the remainder of the season. They'll also play a tribute and hold a moment of silence in his honor before tonight's game against the San Diego Padres at Angel Stadium.

This story first appeared in The LA Local.

For Koreatown resident George Chan, the appeal of public transit in Los Angeles is simple: avoiding the daily grind of driving.

“I don’t like cars, so I’m all for having more public transportation,” said Chan, who lives near Olympic Boulevard and Hobart Street and uses transit about twice a week to get to work in Culver City. “I feel like that’s one of the things L.A. really lacks, a working public transportation system. You go to any other major city and you’re able to take a train anywhere, but here you can’t.”

Even if it takes longer, he said, public transit offers something driving doesn’t.

“I don’t have to sit in traffic. I don’t have to deal with drivers at all,” he said. “I feel pretty comfortable on the train and bus, so it’s not a big deal for me.”

That’s why Chan is looking forward to the opening of the first phase of the Metro D Line extension on May 8, which Koreatown residents like him say will make it easier to reach some of Los Angeles’ most visited cultural hubs without sitting in traffic.

Where things stand

The project, more than a decade in the making, will add three new underground stations along Wilshire Boulevard at La Brea, Fairfax and La Cienega, closing an important gap between Downtown Los Angeles and the Mid-Wilshire area.

From Koreatown, the new stops will put destinations like the Los Angeles County Museum of Art, the Academy Museum of Motion Pictures and the La Brea Tar Pits within roughly a 15- to 20-minute ride from Union Station, offering a faster alternative to driving along one of the city’s most congested corridors. 

Another view of the Wilshire/La Brea Station.

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Courtesy Metro Art

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Los Angeles County Metropolitan Transportation Authority

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Metro projects the new stations will add roughly 16,200 daily riders and increase foot traffic for local businesses. The opening comes more than three years behind its original 2023 timeline and about $700 million over budget, with this part of the project now reaching around $3.51 billion. 

The project is part of Metro’s “Twenty-Eight by ’28” push to finish major transit expansions before the 2028 Olympics and Paralympics.

For Chan, that could mean easier trips west, whether that’s grabbing brunch near Miracle Mile or visiting museums that currently require multiple transfers.

How residents are feeling

Other residents said the expansion is also expected to reshape how often they use transit, particularly for trips that currently require driving. Davis Read, a Koreatown resident who is a part of the Wilshire Center Koreatown neighborhood council, says he uses Metro about once a week now, but that will likely change once he gets more access to the museums by La Brea. 

“I’m also excited to be able to go to Beverly Hills, where a lot of my medical appointments are,” Read said. “That’s something that was usually like a half-hour drive.”

But while many welcome the expansion, residents say the city still has work to do — especially when it comes to building housing people can actually afford, shortening timelines for major transit projects and improving bus infrastructure.

Sherin Varghese, a Koreatown resident and organizer with Ktown for All, said buses remain essential for many in the neighborhood.

“A lot of our neighbors, housed and unhoused, don’t have cars,” she said. “Building out infrastructure that isn’t car-forward is generally a good move.”

At the same time, she noted that buses, which often serve lower-income riders, have historically been deprioritized.

“I’m really excited about the trains,” Varghese said. “But I also want us to continue investing in bus infrastructure, like dedicated bus lanes that don’t get closed off that aren’t just for rush hour.”

Wilshire/La Brea Metro station remains closed off to the public as of April 14.

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Marina Peña

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The LA Local

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For Varghese, who relies on transit regularly, the D Line will open up parts of the city that currently feel out of reach.

“I’m going to be able to take the D straight to LACMA or to the Academy Museum to see a movie,” she said. “It opens up a huge amount of access to the west side.”

Metro's overall plan

The D Line extension is part of Metro’s broader plan to connect Downtown Los Angeles to Westwood through a nine-mile subway, with future phases expected to open in 2027. Additional stations will include Beverly Drive, Century City, Westwood/UCLA and Westwood/VA Hospital.

Another major project — the K Line Northern Extension — would further expand that network by linking South L.A. to West Hollywood. But with funding not expected until 2041 and an opening still years after that, between 2047 and 2049, many residents say the timeline highlights a broader frustration.

After last-minute negotiations between Mayor Karen Bass and local leaders, Metro’s board voted unanimously in late March to approve the route. The planned underground extension would tie into four major rail lines and is projected to carry up to 100,000 riders daily

“There’s a repeated trend in which these great public projects are having to conform around the needs of wealthy home ownership groups. I think that’s frustrating,” Read said. “I think at this point, we should be pressuring our elected leaders to act quicker on the Metro.”

He pointed to the K Line extension as one example, where opposition from a group of homeowners in Mid-City, particularly in affluent Black neighborhoods like Lafayette Square, raised concerns about construction, safety and property values, contributing to delays.

“That’s the most important stitch in the Metro system — it would be a game changer,” Read said. “A two-seat ride to LAX from Koreatown or downtown would make a huge difference. Right now, it takes about three lines and can take just as long as driving in traffic.”

The Wilshire/Fairfax station where the D line and K line would meet is expected to add 33,000 riders, according to Metro.

Residents ask: Why'd it take this long

Varghese, who has lived in Koreatown for 15 years, said her frustration is less about the current timeline and more about missed opportunities in the past.

“I wish we had started this 50 years ago,” she said. “But I’m glad it’s happening now.”

Alongside transit improvements, residents also raised concerns about what new development around stations will look like, particularly whether it will include housing that current residents can afford.

“A lot of the housing is built for upscale renters,” he said. “If they built low-income or cheaper housing, that would be great, but that’s not what’s happening.”

Read said transit and housing need to be planned together.

“If we don’t act drastically to construct new housing, we’re never going to dig ourselves out of this crisis,” he said.

Varghese echoed that concern, pointing to what she sees as a gap between policy goals and what’s actually being built.

“We need to build housing that people can actually afford now,” she said. “We need to be affecting the supply directly and not hoping that housing eventually trickles down in terms of pricing.”

The post ‘I wish we had started this 50 years ago’: Koreatown is ready for Metro’s D Line appeared first on LA Local.