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Newsom, Democrats announce $321-billion California budget deal

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Newsom, Democrats announce 1-billion California budget deal

California leaders reached a tentative agreement Tuesday night on the state budget, which hinges on Gov. Gavin Newsom’s demand that the Legislature pass a housing reform proposal.

The eleventh-hour negotiations about the spending plan, which takes effect July 1, speak to the political challenge of overhauling longstanding environmental regulations to speed up housing construction in a state controlled by Democrats.

The party has been loath to do more than tweak the California Environmental Quality Act, or approve one-off exemptions, despite pressure from the governor and national criticism of a law that reform advocates say has hamstrung California’s ability to build.

The proposal is among a series of policies Newsom and Democratic lawmakers are expected to advance in the coming days as part of the $321.1-billion budget. The deal reflects the Legislature’s resistance to the governor’s proposed cuts to reduce a $12-billion budget deficit expected in the year ahead, citing uncertainty about the scope of the state’s financial problems.

“We appreciate the strong partnership with the Legislature in reaching this budget agreement,” said Izzy Gardon, a spokesperson for Newsom. “The governor’s signature is contingent on finalizing legislation to cut red tape and unleash housing and infrastructure development across the state — to build more, faster.”

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The consensus comes after weeks of conversations about how to offset the deficit, caused by overspending in California, and start to address even larger financial problems anticipated in the future, including from potential federal policy changes.

The tentative deal largely relies on borrowing money, tapping into state reserves, and shifting funding around to close the shortfall. By reducing and delaying many of the governor’s proposed cuts, the budget continues a practice at the state Capitol of sparing state programs from immediate pain while avoiding taking on California’s long-term budget woes.

Assembly Republican Leader James Gallagher (R-Yuba City) said the budget deal papers over the state’s financial problems.

“We’re in this situation because of overspending,” Gallagher said. “We’ve made long-term commitments to programs that Democrats have championed, and now, just like everybody warned, the money is not there to support them all, and they don’t want to cut back their program that they helped expand.”

The cuts lawmakers and the governor ultimately agreed to will reduce the expansion of state-sponsored healthcare to undocumented immigrants and reinstate asset limit tests for Medi-Cal enrollees. The final deal, however, achieves less savings for the state than Newsom originally proposed.

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The plan restores cost-of-living adjustments for child-care workers, which the governor wanted to nix, and rejects his call to cap overtime hours for in-home caregivers.

Democrats in the Legislature successfully pushed to provide another $500 million in funding for Homeless Housing, Assistance and Prevention grants. The governor originally resisted giving more money to counties, which he has chastised for being unable to show results for the billions of dollars in state funding they have received to reduce homelessness.

Assembly Budget Chair Jesse Gabriel (D-Encino) pushed back on the notion that the Legislature hasn’t done “real belt-tightening.” Lawmakers are trying to balance compassion and fiscal responsibility before making drastic cuts to safety net programs that Californians rely on, he said.

“That is the balance that we are trying to strike here with this budget of being responsible, of focusing on the work that we need to do regardless, but also understanding that there is a pretty high delta of uncertainty for a lot of reasons,” Gabriel said.

The budget also preserves Newsom’s plan to provide $750 million to expand the California Film and Television Tax Credit, a proposal supported by Hollywood film studios and unions representing workers in the industry.

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The tentative agreement is expected to serve as a precursor to more challenging financial discussions about additional reductions in the months ahead.

California expects to lose federal funding from the Trump administration and state officials predict a potentially greater funding dilemma in 2026-27.

Here are few key elements of the budget deal, detailed in summaries of the agreement and legislation:

A housing caveat

Described colloquially as a “poison pill” inserted into the budget bill, the agreement between the Legislature and Newsom will only become law if legislators send the governor a version of a proposal initially introduced by Sen. Scott Wiener (D-San Francisco).

Wiener’s bill is expected to lessen the number of building projects that would require a full environmental review under CEQA and make the process of developing environmental impact reports more efficient.

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Paired with another proposal that could exempt more urban housing developments from CEQA, the legislation could mark a significant change in state policy that makes it easier to build.

Newsom is effectively forcing the Wiener proposal through by refusing to sign a budget deal without the CEQA exemptions. The proposal was still being drafted as of Tuesday evening.

The governor declared lofty goals to build more housing on the 2018 gubernatorial campaign trail, but he has failed to spur enough construction to meet housing demand and make homes more affordable.

New York Times columnist Ezra Klein effectively called out the inaction in California caused by the state’s marquee environmental law and a lack of political will in his recent book “Abundance,” which increased pressure on the governor and other Democrats to reconsider their approach and push for more substantial fixes this year.

The CEQA reform bill must be passed by Monday under the budget agreement, which omits a separate Newsom call to streamline the Delta tunnels project.

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Changes to Med-Cal funding

Medi-Cal cost overruns are causing major problems for the California budget. The challenges stem from a higher-than-expected price tag for the expansion of state-sponsored healthcare to all income-eligible undocumented immigrants and medical care for other enrollees.

Newsom’s budget proposal in May suggested substantial trims to the healthcare program for people who are undocumented. His plan included freezing new enrollment as of Jan. 1, requiring all adults to pay $100 monthly premiums, eliminating long-term care benefits and cutting full dental coverage. The changes offered minor savings in the year ahead but could save billions of dollars in future years.

Lawmakers ultimately agreed to require undocumented immigrant adults ages 19 to 59 to pay $30 monthly premiums beginning July 2027. They plan to adopt Newsom’s enrollment cap but give people three months to reapply if their coverage lapses instead of immediately cutting off their eligibility.

Democrats agreed to cut full dental coverage for adult immigrants who are undocumented, but delayed the change until July 1, 2026.

State leaders agreed to reinstate much higher limits than the governor originally proposed on the assets Medi-Cal beneficiaries may possess and still get coverage. The new limits would be $130,000 for individuals and $195,00 for couples, compared to prior limits of a few thousand dollars.

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They also adopted Newsom’s proposal to withdraw Medi-Cal benefits for specialty weight-loss drugs.

Shifting money around

The negotiations resulted in less general fund spending than the Legislature proposed in a counter to Newsom’s budget revision in May, dropping from $232 billion to an estimated $228 billion for 2025-26.

Officials are using more money from California’s cap-and-trade program, which sets limits on companies’ greenhouse gas emissions and allows them to buy pollution credits from the state, including $1 billion next year. They are also using $300 million from climate change bonds instead of the general fund to pay for environmental programs.

Lawmakers and the governor agreed to delay a $3.4-billion payment on a loan to cover Medi-Cal cost overruns and increase the loan by another $1 billion next year.

Trump uncertainty

The plan continues an agreement to take $7.1 billion from the state’s rainy day fund to help cover the deficit and taps into another $6.5 billion from other cash reserves to balance the budget.

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California leaders for months have warned about the so-called Trump effect on the state budget.

Financial analysts at UCLA predict that the state economy is expected to slow in the months ahead due to the effects of Trump’s tariff policy and immigration raids on construction, hospitality, agriculture and other key sectors.

Meanwhile, the state is warning that federal funding reductions to California could require lawmakers to adopt additional budget cuts in August or September, during a special session in the fall or early next year.

State officials expect future deficit estimates to range from $17 to $24 billion annually, according to an Assembly summary of the budget deal.

More to come

The final budget agreement is being publicly released in bits and pieces this week through a series of trailer bills that appear online at random hours.

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Lawmakers are expected to pass a main budget bill on Friday and approve additional legislation by Monday, before the July 1 deadline for the budget to go into effect. Some legislation, such as the CEQA housing exemptions, will not appear in print until the end of the week.

Other decisions, such as reauthorizing California’s cap-and-trade program, will be considered later in the year outside of the budget process.

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Soros-linked dark money network fuels Virginia redistricting push backed by national Democrats

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Soros-linked dark money network fuels Virginia redistricting push backed by national Democrats

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Virginians for Fair Elections, a main group fighting to get Virginia voters to approve a ballot referendum that will allow the state to redraw its congressional maps, has been pumped with millions in cash from a web of George Soros-backed dark money groups and top Democratic Party officials.

The money the group has garnered ahead of Tuesday’s vote, which is poised to allow Democrats in the House of Representatives to potentially take four seats from Republicans going into the midterms, also comes from leading Democratic Party figures and organizations like Nancy Pelosi and the American Federation of Teachers (AFT).

Other left-wing juggernauts pumping money into the Democratic Party’s redistricting effort in Virginia include the Service Employees International Union (SEIU), Eric Holder’s National Democratic Redistricting Committee, which once championed the adoption of “independent redistricting commissions,” national green energy group the League of Conservation Voters, and the U.S. House of Representatives campaign arm for the Democratic Party, according to a Fox News Digital review of state campaign finance records and records from the Virginia Public Access Project (VPAP), which tracks public spending in Virginia.

VIRGINIA DEMS ACCUSED OF ILLEGALLY ‘STEAMROLLING’ STATE LAW THAT COULD UPEND REDISTRICTING CRUSADE

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“Dark money is flooding into Virginia,” GOP strategist Matt Gorman told Fox News Digital. “Democrats talked all about the cost of living during the campaign, but all they did once in office was raise taxes and rig elections. It’ll be the same elsewhere across the country in 2026 too.”

A woman casts her vote at a polling place in Burke, Fairfax County, Virginia, in 2026. (Graeme Sloan/Bloomberg)

Fox News Digital reported in March that the left-wing group fighting to redraw Virginia’s maps raised more than $38 million, according to VPAP’s donation totals based on state campaign finance records. As of right before the mid-April referendum vote, just a handful of weeks later, that total ballooned to more than $64 million.

In 2026, the largest giver to Virginians for Fair Elections was House Majority Forward, the nonprofit counterpart of House Democrats’ House Majority PAC, which has donated over $38 million, records show.

Meanwhile, entities directly tied to Soros, or that obtained significant funding which can be traced back to the billionaire Democrat megadonor, come in second and third in terms of total giving to the group, per VPAP’s accounting of donation totals.

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One of those groups, the Fund for Policy Reform Inc, was founded by Soros. The other, titled The Fairness Project, has been funded by groups like the Sixteen Thirty Fund, Hopewell Fund and the Tides Foundation, which Soros has given significant funding to.

George Soros pictured on the sidelines of the World Economic Forum in Davos, Switzerland, in January 2020. (Simon Dawson/Bloomberg via Getty Images)

DAVID MARCUS: DESPERATE DEMS TAP OBAMA TO PITCH VIRGINIA GERRYMANDERING LIES

Another one of the top donors to the left’s Virginians for Fair Elections is American Opportunity Action, described as “a pure pass-through entity” by Parker Thayer, a dark money expert from the conservative Capital Research Center. The group is so new that it does not even appear to have any 990s filed with the IRS but is still one of Virginians for Fair Elections’ top donors, according to VPAP and state campaign finance records.

Top Democratic Party members of Congress from outside Virginia, including Reps. Nancy Pelosi, D-Calif., Pete Aguilar, D-Calif., and Katherine Clark, D-Mass., also donated tens-of-thousands of dollars, according to a review of state campaign finance records. Democratic Virginia Sen. Tim Kaine’s leadership PAC donated $100,000 as well, while the Democratic Party of Virginia put up just shy of a million dollars, per VPAP’s accounting.

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Meanwhile, a group founded by Obama wingman Eric Holder, who previously championed “independent redistricting commissions,” provided a more than $10,000 in-kind contribution to the left-wing redistricting group, state election filings show. The League of Conservation Voters, and the Soros-backed MoveOn.org were also among Virginians for Fair Election’s top donors. In terms of labor union support, SEIU gave half-a-million, while AFT gave $100,000.

CBS HOST PRESSES FORMER AG ON DEFENDING PARTISAN REDISTRICTING EFFORTS IN VIRGINIA

Fox News Digital reached out to Soros’ Open Society Foundations and the other top donors pumping thousands or millions into the redistricting battle, but did not receive a response ahead of publication.

“No one wanted to take this action, but in a democracy, we can’t let entire states rig their congressional maps just to bend to the will of one person,” Alexis Magnan-Callaway, a spokesperson for The Fairness Project, told Fox News Digital in March.  

“We have to respond. This amendment is a temporary, one-time exception that gives Virginia voters a voice and meets the needs of the current moment, while ensuring Virginia’s bipartisan redistricting process will resume after the 2030 census,” she continued. “This isn’t about favoring one party over another. This is about restoring fairness across the board by temporarily changing Virginia’s congressional districts.”

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A main group in Virginia opposing the redistricting effort led by Democrats, Virginians For Fair Maps, raised a little over $3 million at the time of Fox News Digital’s late March report. However, the right-wing redistricting group in Virginia appears to have gained some ground since then as well, albeit still far behind the left’s Virginians for Fair Elections funding totals.

As of just before the referendum vote Tuesday, the anti-redistricting referendum group raised its fundraising total to nearly $20 million, with most of that money coming from a group by the same name that is also a significant donor to the Virginia Republican Party. 

Other donations to the group come from a series of several much smaller donors, such as $50,000 from the National Shooting Sports Foundation and $100,000 from a wealthy D.C.-area real-estate investor, who donates primarily to GOP campaigns. That investor is the top individual donor at $100,000 out of just a handful of individual contributions, according to VPAP.

Virginia Gov. Glenn Youngkin speaks during the Faith & Freedom Coalition’s Road to Majority Policy Conference at the Washington Hilton on June 22, 2024 in Washington, DC. (Samuel Corum/Getty Images)

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Former Virginia Gov. Glenn Youngkin, a Republican, has reportedly given more than $500,000 in efforts against the redistricting measure, per reporting from the Virginia Scope. He also has been a leading voice in Virginia holding events to campaign against the measure despite no longer being in office.

Wealthy tech entrepreneur and Republican donor Peter Thiel has reportedly donated to Justice for Democracy PAC, which has been part of the anti-redistricting effort alongside Virginians for Fair Maps as well.

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Governor’s race wildly unpredictable two weeks before Californians receive ballots

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Governor’s race wildly unpredictable two weeks before Californians receive ballots

The most unpredictable California governor’s race in recent history took another set of dizzying turns on Monday, with former Health and Human Services Secretary Xavier Becerra surging after former Rep. Eric Swalwell dropped out in the face of sexual assault and misconduct allegations, and former state Controller Betty Yee ending her bid.

The race to replace termed-out Gov. Gavin Newsom is the first in a quarter of a century with no clear front-runner and a sprawling field of candidates who have been jockeying for the attention of Californians, who are just beginning to pay attention to the campaign two weeks before ballots arrive in their mailboxes.

“I certainly could not have imagined the twists and the disturbing turns that this race has taken,” Yee said as she announced she was dropping out. “But through it all, my values and my vision for California has never wavered.”

A poll released Monday by the state Democratic Party — its first since Swalwell (D-Dublin) dropped out — showed Becerra’s support jumped nine points to 13%, placing him in a tie with Tom Steyer, the billionaire hedge fund founder turned environmental warrior. Former Rep. Katie Porter of Orange County saw a slight bump to 10% from 7%, while the remaining Democrats in the contest were mired in the low single digits.

The party began the surveys out of concern that Democrats could be shut out of the governor’s race because of California’s unique primary system, where the top two vote-getters in the June 2 primary move on to the November general election regardless of political party.

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“I continue to believe there are too many Democrats in the field,” California Democratic Party Chairman Rusty Hicks told reporters Monday. “My call for candidates to honestly assess the viability of their candidacy and campaigns still stands, especially if you are stalled in the single digits, seeing financial resources dry up and/or are failing to pick up additional support.”

Hicks and other party leaders and allies had unsuccessfully urged low-polling candidates to reconsider their candidacies before the filing deadline in an attempt to cull the field and avoid splintering the Democratic vote. Though most did not name candidates who they thought should think about their viability, Yee was widely believed to be among them.

Yee became emotional as she said on Monday that she decided to withdraw from the race because she wasn’t able to raise the resources necessary to compete in the state. She also said her message of competency and experience wasn’t resonating among voters who were seeking a fiery foil to President Trump, not “Boring Betty,” as she dubbed herself. Yee said she would assess the field before making an announcement on whether she would endorse one of her fellow Democrats.

Becerra was another candidate believed to be a target of party leaders’ efforts to shrink the field. But he held on and apparently benefited from Swalwell’s downfall.

“I’m not the richest candidate, I’m not the slickest candidate, but I am the guy that’s got you,” Becerra said, rallying supporters in Los Angeles on Saturday.

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The audience was filled with members of labor groups backing the longtime politician, and Becerra told them he’d serve as a “union man” in the governor’s office.

Pro- and anti-Becerra forces tussled outside the town hall after two people, who declined to identify whom they were working for, passed out fliers highlighting critical media investigations of the U.S. Department of Health and Human Services during the migrant crisis when the agency was led by Becerra.

Pro-Becerra attendees grabbed the fliers and told the men to go away, prompting a security guard to intervene.

The question is whether Becerra, who also served as state attorney general, a member of Congress and a state Assembly member, can raise the funds necessary to compete in a state with some of the nation’s most expensive media markets. And he was tied in the state party poll with a billionaire who dumped an additional $12.1 million of his own money into his campaign last week.

Steyer’s total investment in his bid reached $133 million, according to the California secretary of state’s office. He also received the endorsement of Our Revolution, a progressive political organization founded by U.S. Sen. Bernie Sanders (I-Vt.).

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“We’ve never endorsed a billionaire — but Tom Steyer is using his position to upset the system,” the group posted on X on Monday. “As Our Revolution executive director Joseph Geevarghese told @theintercept, ‘He’s been a partner in the movement. Most billionaires have used their wealth and privilege to lock in the status quo. Tom is doing the opposite.’”

San Jose Mayor Matt Mahan, who is also running for governor, accused Steyer of hypocrisy for the hedge fund he founded profiting from investments in private prisons being used to house ICE detainees, and Steyer calling for the abolishment of ICE.

Steyer got “rich investing off the ICE infrastructure he now wants to abolish,” Mahan posted on Instagram.

Steyer, who sold his stake in the hedge fund in 2012, has said he ordered the company to divest from the private prison company and has repeatedly expressed remorse about his former firm’s ties with the detention company.

Mahan also appeared Monday at a Hollywood production lot to announce his proposal for a special fund to lure sporting events, concerts and other productions to California as part of his plan to help the struggling film and television industry.

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An independent effort supporting Mahan has also raised roughly $11 million since Swalwell left the race.

Mehta reported from Los Angeles and Nixon from Sacramento. Times staff writer Dakota Smith contributed to this report.

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US military announces another deadly strike against ‘narco-terrorists’

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US military announces another deadly strike against ‘narco-terrorists’

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The U.S. military announced another deadly strike against a vessel that it alleges was involved in “narco-trafficking” efforts.

“On April 19, at the direction of #SOUTHCOM commander Gen. Francis L. Donovan, Joint Task Force Southern Spear conducted a lethal kinetic strike on a vessel operated by Designated Terrorist Organizations,” U.S. Southern Command indicated in a post on X.

“Intelligence confirmed the vessel was transiting along known narco-trafficking routes in the Caribbean and was engaged in narco-trafficking operations,” the post continued.

US MILITARY KILLS 2 SUSPECTED CARTEL OPERATIVES IN LATEST EASTERN PACIFIC LETHAL STRIKE, SOUTHCOM SAYS

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The U.S. military announced that it killed three “narco-terrorists” in a strike in the Caribbean on Sunday, April 19, 2026. (@Soutcom via X)

SOUTHCOM indicated that the attack killed three men.

“Three male narco-terrorists were killed during this action. No U.S. military forces were harmed,” the post noted.

President Donald Trump’s administration has carried out dozens of deadly strikes against vessels of alleged “narco-terrorists.”

US MILITARY CONDUCTS MORE DEADLY STRIKES AGAINST VESSELS OF ALLEGED ‘NARCO-TERRORISTS’

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Marine Corps Lt. Gen. Francis L. Donovan, nominee for commander of U.S. Southern Command, testifies during his Senate confirmatino hearing on Capitol Hill in Washington, D.C., on Jan. 15, 2026. (Brendan Smialowski/AFP via Getty Images)

In a completely different part of the world, amid ongoing tensions between America and Iran, the U.S. attacked an Iranian-flagged cargo ship on April 19.

“Guided-missile destroyer USS Spruance (DDG 111) intercepted M/V Touska as it transited the north Arabian Sea at 17 knots enroute to Bandar Abbas, Iran. American forces issued multiple warnings and informed the Iranian-flagged vessel it was in violation of the U.S. blockade,” U.S. Central Command noted.

US SEIZES IRANIAN SHIP AFTER OPENING FIRE; PAKISTAN TALKS IN DOUBT

President Donald Trump on the South Lawn of the White House before boarding Marine One in Washington, D.C., on Thursday, April 16, 2026. (Graeme Sloan/Sipa/Bloomberg via Getty Images)

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“After Touska’s crew failed to comply with repeated warnings over a six-hour period, Spruance directed the vessel to evacuate its engine room. Spruance disabled Touska’s propulsion by firing several rounds from the destroyer’s 5-inch MK 45 Gun into Touska’s engine room. U.S. Marines from the 31st Marine Expeditionary Unit later boarded the non-compliant vessel, which remains in U.S. custody,” CENTCOM noted.

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