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California Legislature rejects many of Gov. Gavin Newsom's budget cuts as negotiations continue

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California Legislature rejects many of Gov. Gavin Newsom's budget cuts as negotiations continue


SACRAMENTO, Calif. (AP) — The California Legislature on Thursday rejected many of Gov. Gavin Newsom’s most difficult budget cuts, choosing instead to speed-up a temporary tax increase on some businesses to help pay off an estimated $45 billion deficit while preserving spending on many social safety net programs.

Thursday’s vote was not really a public rebuke of Newsom, a Democrat who for the most part has had a good relationship with a Legislature dominated by members of his own party. Lawmakers had to pass a balanced budget before Saturday in order to keep getting paid while negotiations on a final spending plan continue.

Instead, the Legislature’s proposal outlines the differences between Newsom, a second-term governor who many believe holds presidential aspirations, and a liberal state Legislature that is often more willing to take risks.

While Newsom’s budget proposal preserved most of the state’s major assistance programs, he included a number of smaller cuts that angered his Democratic allies. He proposed to stop paying for in-home caretakers for some disabled immigrants on Medicaid. He wants to eliminate a program that helps provide housing for families with incomes less than $13,000 per year. And he suggested delaying a rate increase for organizations that care for people with intellectual disabilities.

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To reject these cuts, lawmakers needed to find more money. They found it by taking one of Newsom’s ideas and making it happen faster.

Newsom proposed temporarily stopping some businesses from deducting financial losses from their state taxable income, thus increasing their tax bill. It has become a common way to increase revenue during budget shortfalls. The Legislature chose to do this, too, but their plan would start the tax increase one year earlier. That generated an extra $5 billion in revenue compared with Newsom’s plan.

Lawmakers also found large budget cuts in other places. They want to cut $1 billion out of the state’s prison budget, arguing the money isn’t needed now that the prison population is about half of what it was two decades ago. And they want to cancel a $400 million loan to PG&E that would help extend the life of the Diablo Canyon nuclear power plant.

One major issue that has yet to be addressed by either side is what to do about a minimum wage increase for health care workers that is scheduled to start on July 1. Newsom signed a law last year that would eventually raise health care workers’ minimum wage to $25 per hour over the next decade.

The wage increase is expected to cost the state hundreds of millions of dollars in increased wages for some state workers and increased payments in the state’s Medicaid program, according to an analysis by the University of California-Berkeley Labor Center. Newsom has said he wants to delay the minimum wage increase, but he so far has been unable to get an agreement from the state Legislature.

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Republicans, who don’t have enough numbers to sway policy decisions and say they were left out of the budget negotiations with Democrats, criticized the Legislature’s spending plan as unsustainable. Republican state Sen. Kelly Seyarto accused Democrats of “divesting” from the state’s prison system “instead of fixing it and creating a system that works for all of us.” And Republican state Sen. Roger Niello said it was dangerous for Democrats to assume the state would collect more revenue next year than what the Legislative Analyst’s Office had projected.

“One of the easiest ways to balance a public sector budget is just to assume more revenue and you don’t have to deal with that until the year is over,” he said. “This budget is balanced nominally. But it is not sustainable.”

Democratic state Sen. Scott Wiener said the Legislature’s budget is a plan “we can all be proud of.” He defended the budget cut for prisons, saying “it is absolutely absurd that we have reduced our prison population by 50% and yet we’re spending more on prisons.”

“We can have accountability for committing crimes without going back to mass incarceration,” he said.

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A fast-growing wildfire in windy Southern California triggers evacuations

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A fast-growing wildfire in windy Southern California triggers evacuations


RIVERSIDE, Calif. — A smoky and fast-growing wildfire Friday in windy Southern California has prompted multiple evacuation orders and warnings.

The Springs Fire broke out at around 11 a.m. Friday and by the evening had grown to about 5.47 square miles (14.17 square kilometers), with fire crews starting to contain it. The cause of the fire east of Moreno Valley in Riverside County is under investigation. It was not immediately known how many households are under evacuation warnings or orders.

The fire was burning in a populated — but not densely so — unincorporated part of Riverside County, in a recreational area near the city of Moreno Valley, which has a population of roughly 200,000. The city is 10 miles (16 kilometers) southeast of Riverside and 64 miles (103 kilometers) east of Los Angeles.

Springs Fire In Moreno Valley Explodes To Burn Over 3,500 Acres
A firefighting aircraft sprays red flame retardant at the site of the Springs Fire, on Friday.Qian Weizhong / VCG via Getty Images

“It’s windy out there,” said Maggie Cline De La Rosa, a public information officer for the California Department of Forestry and Fire Protection in Riverside County.

Alex Izaguirre, a spokesperson for the Cal Fire Riverside County, said the wind is “spreading the smoke,” prompting concerned calls from residents in neighboring cities who can see and smell the smoke.

The National Weather Service issued a wind advisory for San Bernardino and Riverside County valleys through Saturday afternoon, with gusts of up to 50 mph (80 kph) expected.

“Tree limbs could be blown down and a few power outages may result,” the advisory read.

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Doctors, nurses arrested in Southern California health care fraud investigation

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Doctors, nurses arrested in Southern California health care fraud investigation


LOS ANGELES — The U.S. Department of Justice on Thursday announced what they called a major health care fraud takedown throughout Southern California, which included the arrest of doctors and nurses.

First Assistant U.S. Attorney Bill Essayli was joined during a press conference by several law enforcement agencies including the FBI, and Dr. Mehmet Oz, head of the Centers for Medicare and Medicaid Services.

They said they served a series of search and arrest warrants throughout the region, from Covina to Lakewood in Los Angeles County. Eight people were arrested and more than a dozen are being charged for suspected health fraud.

They also mentioned fraudulent hospice care.

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“These defendants recruited beneficiaries who were not terminally ill, and paid them to pose as patients receiving hospice care. Medicare then paid millions of dollars – hundreds of millions of dollars – on false and fraudulent claims submitted by fraudsters,” said Essayli.

Among those arrested were a Covina couple. Prosecutors said 66-year-old psychologist Gladwin Gill and his wife, Amelou Gill, a registered nurse, operated a fraudulent hospice business out of Glendale.

“This particular hospice submitted more than $5.2 million in fraudulent claims, and Medicare actually paid out more than $4 million,” Essayli said.

Gill’s attorney told our sister station, ABC7 Eyewitness News in Los Angeles, he denies the allegations and looks forward to his day in court.

Oz announced a broader review of hospice providers in the state.

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“We’re going to review every single hospice in California to make sure that they’re all appropriate, and we hope to do that expeditiously. We’ll do it this year,” Oz said.

During the news conference, federal authorities were questioned about a video California Gov. Gavin Newsom said in January his office was reviewing. In that video, Oz, who is Turkish American, was shown standing in front of an Armenian-owned bakery in Van Nuys while alleging widespread fraud in the area.

Essayli confirmed that none of the defendants named Thursday were connected to that video. Oz responded to outcry that his accusations, which the business owner denounced as false, were discriminatory.

“I was stating the facts as they’ve been explained to me, and we have a lot of evidence of where the fraud is, just looking at the numbers,” Oz said.

Oz did not provide any evidence against a specific business in connection to that video. He suggested that half of Los Angeles County hospice care facilities are fraudulent, pointing to survival percentages as evidence.

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“World experts at CMS say if you’ve got 100% or near survival, certainly if you’ve got a survival over 50% for population that’s supposed to have passed in six months, you’ve got a problem,” he said.

Newsom responded to accusations that California had not done enough to address hospice fraud, saying in part, “The Trump Administration – home to the biggest fraudsters on Earth – is trying to blame California for issues with THEIR federal programs.”

His press office said the state has taken action for years, including suspending more than 280 licenses and banning new ones.

Copyright © 2026 KABC Television, LLC. All rights reserved.



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California law allowing people to cook, sell food from homes getting statewide push

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California law allowing people to cook, sell food from homes getting statewide push


A home-based food movement has been heating up in California, with home cooks turning their beloved family recipes into small businesses. 

When most people get laid off, they update their résumés. James Houlahan preheated his oven.

“It’s pretty brutal, and since nobody’s hiring, I just figured I need to make a job for myself,” he said.

So the San Francisco Bay Area resident went back to a family recipe and decided to take a risk, with a whisk. He started making pavlovas, a light, meringue-based Australian dessert, crisp on the outside and soft in the middle.

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“It’s something my mom and I always joked about whenever we’d bring a pav to a party, this thing kills,” Houlahan said. “So we figured, someone’s gotta make a business out of this.”

So he did, out of his own kitchen in Alameda. 

And that’s not a loophole. A 2019 law called MEHKO, or Microenterprise Home Kitchen Operation, allows people to cook and sell food right out of their homes. Since then, more than 1,000 of these home kitchens have opened across California, operating under a growing but still patchwork system.

There are rules: food must be made from scratch and sold the same day. Not every county is on board, but there is now a push to expand it statewide.

Roya Bagheri, the executive director of The Cook Alliance, the nonprofit behind MEHKO, said the law is gaining momentum across the country as other states consider their own versions. 

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“The cost of getting something like a food truck or a brick and mortar restaurant is so high, this creates an access to enter the food industry,” she said.

A study by the group showed more than a third of home kitchen operators have used MEHKO as a stepping stone into something bigger.

But for some, the law is still a little undercooked. Jot Condie, president and CEO of the California Restaurant Association, warned that some counties may not have the resources to take it on.

“If they don’t have the budget, there may not be a rigorous inspection procedure, and that is a huge concern for us,” Condie said.

As for Houlahan, he’s betting on his own kitchen and his mother’s name: Marianne’s Pavlovas. And his customers, like Flora Tso, are already sold.

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“Nowadays it just gives us more choice,” she said.



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