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California health care workers banking on a state-ordered minimum wage increase later this year might have to wait a little longer.

Because of the state’s $38 billion projected budget deficit, Gov. Gavin Newsom on Wednesday said he is seeking changes to a law he signed just three months ago that set the health care industry on a path to a $25 minimum wage.

The first pay increases were expected to take effect in June. It’s unclear how long the proposed changes could push back that schedule. Newsom wants the wage increases to take place when the state’s fiscal outlook is healthy.

He said he signed the law, Senate Bill 525, in October because he “had a commitment on that trigger” from proponents of the law, meaning that the bill’s backers had agreed to tie the wage increase to the state’s budget outlook. His administration did not disclose that agreement when he signed the law.

Erin Mellon, a spokesperson for the governor’s office, said the administration publicly discussed the possibility of clean-up legislation soon after Newsom signed the law. She pointed to a Los Angeles Times article that published three weeks after Newsom signed the law in which another spokesperson said the administration was working on “accompanying legislation to account for state budget conditions and revenues.”

Newsom included his request for a delay in the state budget proposal he released Wednesday. He said he is working with legislators and the law’s proponents to craft changes that will be presented in the form of a new bill later this month. His budget proposal said he also wants the Legislature to clarify whether state health workers are exempt from the law.

California minimum wage increases

The law was one of two bills Newsom signed last fall raising the minimum wage for certain workers in specific industries. A separate law that raises the minimum wage for fast-food workers to $20 an hour starting in April is moving forward. The California minimum wage for other workers is $16 this year.

Close to 500,000 California health care workers are expected to see pay increases under the minimum wage law for their industry once it goes into effect.

The bill came together late in the legislative year after SEIU, the law sponsor, and a group of health care employers, including the California Hospital Association, brokered a deal under which both sides supported the wage increase. Newsom signed it without a clear cost estimate.

Newsom’s Department of Finance released a price estimate in November, projecting it would cost the state approximately $4 billion in 2024-25, with $2 billion coming out of the state general fund.

SEIU declined an interview after Newsom’s budget remarks. It released a statement that said it would continue working with the administration and the Legislature.

Lawmakers anticipated budget deficit

Newsom’s signature on the bill surprised some lawmakers because they anticipated a steep deficit.

“While we didn’t know what the deficit was at the time, I, at least, was assuming that the news was going to be not good and I couldn’t understand why we would be so deliberately adding to our own overhead,” said Sen. Roger Niello, a Fair Oaks Republican who sits as vice chair of the Senate budget and fiscal review committee

The health worker pay law aims to create more sustainable incomes as a way to retain and attract workers in a field that for years now has been dealing with serious staff shortages. The law would cost the state because it applies to workers at state-owned facilities and because the state would likely have to raise Medi-Cal rates paid to providers to offset some of their increased costs associated with the wage hikes.

Before securing a statewide boost in pay, SEIU California and its affiliate chapters pushed to increase wages for health workers at the local level through city ordinances and ballot measures. In 2022, the union secured its first local win in the city of Inglewood, where health workers at private health facilities qualified for a new floor wage of $25 that went into effect on Jan. 1, 2023.

Lines stretched around the block Sunday at the Original Saugus Cafe in Santa Clarita. It was supposed to be the restaurant's last day before closing after 139 years — making it the oldest continually operated restaurant in Los Angeles County.

But earlier this week, a sign was posted on the door saying, "Reopening under new ownership soon," although there were few details about who would be running it.

The sign was a surprise to the Mercado family, who have operated the restaurant for nearly 30 years. The family now is in a legal dispute with the Arklin family, who owns the property, about the potential re-opening and who owns the historic name.

The background

Alfredo Mercado worked his way up from bartender to restaurateur, purchasing the business in 1998. Since then Mercado and his daughters have operated the restaurant, leasing from the Arklin family. For most of that time, according to the Mercado side, the two families maintained good terms. Property owner Hank Arklin Sr., a former state assemblyman who owned other properties in the area, kept a verbal month-to-month agreement with the Mercados — no written lease required.

That changed when Arklin died in August at age 97.

New terms, failed negotiations

Larry Goodman, who manages multiple properties for the Arklin family's company, North Valley Construction, took over the landlord relationship. In September, the Mercado family say they were presented with a new written month-to-month lease.

Yecenia Ponce, Alfredo's daughter, said the new terms included various changes to the existing agreement, including a rent increase and charges for equipment.

Months of back and forth negotiations about different options, including selling the business, ultimately fell apart. Their attorney, Steffanie Stelnick, says they are being forced out, without proper legal notice, and has sent a cease-and-desist letter to Goodman saying the family has plans to continue running the business.

LAist reached out to Goodman for comment repeatedly Wednesday and Thursday by phone but did not hear back.

Goodman told The Signal, a Santa Clarita valley news outlet, that Alfredo Mercado had changed his mind several times in recent weeks about keeping the business.

“I said, ‘Fine,’ then I got out and got someone to take it over,” Goodman said.

He said he'd been in contact with Eduardo Reyna, the CEO of Dario's, a local Santa Clarita restaurant, and that the cafe could re-open as soon as Jan. 16.

Who owns what?

The dispute also focuses on who owns the rights to the Original Saugus Cafe name.

Ponce said when her father purchased the restaurant in 1998, it was called The Olde Saugus Cafe, but the name was then changed to The Original Saugus Cafe. State records show that name registered as an LLC under Alfredo Mercado.

After Arklin’s death, however, the Arklin family filed a pending trademark application to lay its own claim to the name.

The Mercado family is resisting.

"As long as they don't buy the name from us, we're not handing it over," Ponce said.

Ponce said the family had no idea the landlord planned to continue operations.

"We truly did think we were closing," she said. "We were not aware that they had plans to continue."

She apologized to customers for the confusion.

Whether the decades-old restaurant name survives — and under whose control — may ultimately be decided in court.

Community leaders and politicians in Los Angeles are responding in outrage after an ICE agent shot and killed a woman in Minnesota on Wednesday.

The fatal ICE shooting of 37-year-old Renee Good has sparked anger and fear in Los Angeles, which has been an epicenter of federal immigration enforcement since the summer.

Jorge-Mario Cabrera with the Coalition for Humane Immigrant Rights, or CHIRLA, says the killing was upsetting but not surprising.

" Los Angeles has been witness of the escalating aggressiveness of these federal agents against the community," he told LAist.

Homeland Security Secretary Kristi Noem has defended the shooting, saying Good was trying to run agents over with her car. That account has been disputed by eyewitnesses, the mayor of Minneapolis and other officials. Bystander video also challenges the federal narrative, according to MPR News.

L.A. politicians have joined a chorus demanding justice for Good. Mayor Karen Bass posted on X, saying that ICE agents are waging "a purposeful campaign of fear and intimidation" on American cities.

"The senseless killing of an innocent and unarmed wife and mother by ICE agents today in Minneapolis is shocking and tragic and should never have occurred," she said in the post.

L.A. County Supervisor Janice Hahn called on Noem to withdraw ICE from U.S. cities.

“These ICE agents are undertrained and trigger happy and everyone who has seen this video knows ICE murdered this woman,” she said in a statement.

Some protesters also gathered outside the federal building in downtown L.A. Thursday morning to condemn the killing.