California
California officials detail Trump funding freeze 'chaos,' warn another could cripple state
Maricela Ramirez was at an education conference in Washington, D.C., at the end of January when she and other attendees heard the startling news: Federal funding for Head Start programs, which provide early-learning and nutritional support for low-income children nationwide, had been frozen.
Ramirez, chief education officer for the Los Angeles County Office of Education, quickly contacted colleagues and realized it was true. They had tried to make a routine withdrawal of millions of dollars in funding the day prior, but it hadn’t arrived overnight as expected.
Ramirez said “stress and panic” quickly began to set in, both in her office and among the conference attendees all around her.
“Our team had to assess whether LACOE would have to shut down its programs and to determine where LACOE could find funding to pay its employees if the system continued to be down,” Ramirez recently wrote in a legal filing. Pauses in federal funding could disrupt mental health services, counseling, health screening and nutritional support for up to 8,000 children, she added.
Ramirez’s account of the fallout and ongoing fear caused by the Trump administration’s sudden decision to halt billions of dollars in federal financial aid last month was one of more than 125 declarations of harm filed as part of a multi-state lawsuit challenging the freeze in U.S. District Court. At least 16 declarations came from California.
Together, the declarations paint a picture of alarm and chaos in the hours and days after the White House budget office announced the freeze in a Jan. 27 memo, and of lingering fear and uncertainty as the Trump administration continues to fight for such budget authority in court.
While the administration rescinded the Office of Management and Budget memo two days after it was issued amid substantial public uproar, some funds remained frozen in the days that followed. And in response to the states’ lawsuit, the Trump administration argued that Trump and OMB “plainly have authority to direct agencies to fully implement the President’s agenda.”
U.S. District Judge John J. McConnell Jr. ordered Jan. 31 that the freeze be temporarily lifted while the litigation plays out. He further blocked it on Feb. 10, in part on the strength of the declarations — writing that the administration’s “categorical and sweeping freeze” was “likely unconstitutional and has caused and continues to cause irreparable harm to a vast portion of this country.”
The Trump administration accused McConnell of “intolerable judicial overreach,” but has backed off an appeal as the litigation continues.
In one declaration, Mary Halterman, an assistant program budget manager at the California Department of Finance, wrote that federal funding “typically comprises about a third” of the state’s budget. In fiscal 2024-25, the state’s $500-billion budget anticipates $168 billion in federal funds, not including funding for the state’s public college and university system.
The largest chunk, some $107.5 billion, is for payments under Medi-Cal, California’s version of Medicaid, which provides healthcare to nearly 15 million low-income Californians, or more than a third of the state’s population, Halterman wrote.
That includes about 5 million children — more than half of the kids in the state.
Congress also has allocated California $63 billion under the Infrastructure Investment and Jobs Act of 2021, and nearly $5 billion under the Inflation Reduction Act of 2022, “for programs related to public transportation, roads and bridges, water infrastructure, and broadband infrastructure, among others,” Halterman wrote.
The Office of Management and Budget’s funding freeze memo immediately created “confusion and doubt” as to California’s ability to continue providing such services, Halterman wrote. And that uncertainty was “ongoing,” she wrote.
Sen. Bernie Sanders (I-Vt.) protests against the policies of President Trump and Elon Musk at the U.S. Capitol on Wednesday.
(Jose Luis Magana / Associated Press)
“Without knowing whether and when federal dollars will be disbursed, state agencies may not be able to outlay those funds, causing immediate pause or potential termination of government services in some sectors,” Halterman wrote.
The freeze set off similar alarm bells among state officials overseeing Medi-Cal and other federally funded health programs, especially after they realized Jan. 28 that a $200-million payment hadn’t been received, wrote Lindy Harrington, an assistant state Medicaid director.
The department “managed to continue operations” that day, but “did not have sufficient funds to meet future financial obligations,” she wrote, and she now fears the “budgetary chaos” of a longer disruption — under which “health care services could be drastically curtailed or even cease altogether.”
California officials overseeing other public health and safety programs raised similar fears after being locked out of funding for a range of environmental and infrastructure projects, including to clean up contaminated industrial sites, monitor air quality in low-income and disadvantaged communities and reduce dangerous and potentially deadly pollution along the busy freight corridor between Los Angeles and the Inland Empire.
Eric Lau, acting deputy director of the division of administrative services at the California State Water Resources Control Board, said his agency since 2021 has received hundreds of millions of dollars in federal grants for projects related to safe drinking water and overflow and stormwater management.
About 8 a.m. on Jan. 28, Lau staff found only 31 of the board’s 45 grants were visible in its federal payment system, and searches for the 14 others produced an alarming message: “ERROR 839: No accounts found matching criteria.”
It took days for some of the accounts to come back online, Lau wrote, warning that longer disruptions could be catastrophic.
“The design, construction, and maintenance of critical water facilities will be stalled, risking continued water contamination, supply disruptions and severe threats to public health and the environment,” he wrote. “Ultimately, Californians’ right to safe, clean, affordable, and accessible water will be threatened.”
Federal funding also was temporarily blocked for researchers at California State University and University of California campuses, homeowners and contractors retrofitting homes to be more energy efficient, regulators overseeing workplace safety violations and job search assistance, career services, and training programs at dozens of local workforce development centers statewide.
Both state and local officials warned that any cuts to federal funding that aren’t carefully considered by Congress and articulated in advance — giving localities time to draft new budgets of their own — are deeply unwise and potentially dangerous.
California Supt. of Public Instruction Tony Thurmond wrote that the state receives $7.9 billion in annual funding from the U.S. Department of Education, which supports 5.8 million students. The temporary freeze on funding last month did not disrupt school programs, in part because the state did not have any major draw on federal funds scheduled.
However, any interference to those funds moving forward would “do immeasurable harm” to educators and students, particularly low-income students and students with disabilities, he wrote.
For the current school year, the state is receiving $1.5 billion in direct funding for special education students, Thurmond wrote. In addition, public schools draw heavily on Medi-Cal — to the tune of millions of dollars per school per year — to provide additional therapies and mental and physical health services, Thurmond wrote.
California schools also receive huge amounts of federal funding under the Every Student Succeeds Act. This fiscal year, California was allocated $2 billion in ESSA funds to “meet the needs of some of its most vulnerable students,” and to ensure that they meet certain proficiency standards, Thurmond wrote. Among other things, it was allocated $120 million for the education of “migratory children,” $232 million to strengthen the quality and effectiveness of school staff, $157 million for English language acquisition and enhancement programs, and $152 million for improving school conditions and technology, Thurmond wrote.
California schools also spend $40 million to $50 million in federal funds per week to feed students through nutrition programs.
Another freeze “could cause layoffs, suspension of services to needy students and disruption of student learning supports,” Thurmond wrote.
State programs completely unrelated to education would also be put at risk, he wrote, given that many education programs are mandatory under state and federal law and the state would be forced to shuffle its resources around to provide them no matter what.
Mason Matthews, chief budget and financial officer in L.A. County Chief Executive Fesia Davenport’s office, shared those wider budget concerns. The county is the most populated in the nation with about 10 million residents and a budget of about $49 billion, with an estimated $5.3 billion in federal funding.
Matthews wrote that the “exact ramifications” of the recent pause on federal funding “remain unknown,” but the risks posed by another freeze are high — threatening “a range of vital commitments to [county] residents including, but not limited to, healthcare, public safety operations, public benefits, workforce development, foster care, child support, housing and emergency management.”
One affected group would be needy families who receive cash assistance, employment services and child care through the state’s CalWORKS program, through which the county receives more than $2 billion in federal funds annually, Matthews wrote. Also at risk would be abused children, he wrote, as the county’s Department of Children and Family Services relies on $604.5 million in federal funding annually to investigate abuse and neglect and provide “supportive and therapeutic services” for such children.
More broadly, because federal funding amounts to about 10% of the county budget, another freeze would cause “significant budget and administrative burdens” for the county and “irreparably harm the day-to-day lives” of all county residents, Matthews wrote. That’s especially true given the budget strain already being felt from the devastating wildfires that incinerated parts of the county last month.
“The withholding of federal funding, coupled with the ambiguity and uncertainty regarding which funds will be withheld and for how long, will cause irreparable harm and jeopardize critical response and recovery efforts,” Matthews wrote. “Though the County will take appropriate actions to respond to the LA County Fires, without reimbursement from federal funding, other County crucial programs may be impacted such as housing options for homeless families and veterans.”
California
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California
Live Updates: Candidates face off in the CBS News California and San Francisco Examiner Governor’s Debate
Learn more about candidates’ stances on the issues in the California Governor’s Race interactive guide
CBS News California launched an interactive tool to help voters navigate this year’s gubernatorial race. The California Governor’s Race Candidate Guide features 20 hours of interviews with top-polling candidates to provide voters the opportunity to compare each candidate’s responses side-by-side on the issues that matter most to them.
Those running to succeed Gov. Gavin Newsom as California’s next chief executive offered their thoughts on more than a dozen issues, including homelessness, housing affordability, gas prices and environmental policy, immigration, healthcare, crime and public safety funding, and the state’s ongoing insurance crisis.
Here’s what to know about the CBS News California/San Francisco Examiner Governor’s Debate format
The format of the CBS News California and San Francisco Examiner Governor’s Debate on Thursday will allow candidates to question each other directly.
Candidates will also participate in segments in which they address real-world issues California voters may face in their daily lives. The Californians who will be featured include a working single mother pursuing education; a couple struggling to achieve homeownership; and a scientist warning of the long-term consequences of inaction on climate change.
This structure for Thursday’s debate differs from the previous face-off hosted by CBS News California stations, which comprised three segments focused on affordability, accountability and social issues that lasted roughly half an hour each.
Becerra, Hilton, Steyer lead field in latest polling on California governor’s race
An Emerson College poll released the day before the CBS News California and San Francisco Examiner Governor’s Debate showed Xavier Becerra leading the field with likely voters surveyed at 19%, followed by Steve Hilton and Tom Steyer both receiving 17%. Chad Bianco came in at 11%, followed by Katie Porter at 10%, Matt Mahan at 8%, Antonio Villaraigosa at 4% and Tony Thurmond at 1%. Twelve percent said they remained undecided.
In a CBS News/YouGov poll last month conducted before the April 28 CBS California Governor’s Debate, Hilton received support from 16% of likely voters polled, with Steyer and Becerra following at 15% and 13% respectively. Bianco came in at 10%, Porter received 9%, Matt Mahan and Antonio Villaraigosa both received 4%, and Tony Thurmond received 1%. The survey also found that a significant 26% of those polled were undecided.
California’s June 2 primary is an open primary where the top two vote-getters, regardless of party affiliation, advance to face off in the November general election.
California
Opinion | California will make less money from greenhouse gas emission auctions
By Dan Walters, CalMatters
This commentary was originally published by CalMatters. Sign up for their newsletters.
Two decades ago, when California got serious about reducing or even eliminating carbon dioxide and other greenhouse gases, its political leaders weighed two potential tactics about industrial emissions.
The state could impose direct facility-by-facility limits, generally favored by climate change advocates. Or it could set overall emission reduction goals that would gradually decrease and auction off emission allowances, assuming their costs would encourage reductions.
The latter, known as cap-and-trade, was favored by corporate interests as being less onerous and was adopted, finally taking effect in 2012.
Since then, the California Air Resources Board has conducted quarterly auctions of emission allowances, collecting a total of $35 billion dollars so far, which, in theory, is being spent on projects that would reduce emissions.
The revenues have varied from year to year, but they have generally increased as the emission caps have declined. Since reaching a peak of $8.1 billion in the 2023-24 fiscal year, however, auction proceeds have been declining.
Roughly half of the money has been given to utilities to minimize cap-and-trade’s impact on consumer costs. However, the program has been widely criticized as a de facto tax on gasoline and other fuels, which were already among the most expensive of any state.
The remaining revenues have been deposited into a Greenhouse Gas Reduction Fund that governors and legislators have tapped for various purposes, not all of them connected to emission reductions. In a sense, it’s been a slush fund.
Last year Gov. Gavin Newsom and the Legislature overhauled the program in two bills, Senate Bill 840 and Assembly Bill 1207. The program was extended, it was renamed as cap-and-invest and new priorities for spending auction proceeds were set.
Notably, the state’s cash-strapped and long-stalled bullet train project would get a flat $1 billion a year, rather than the 25% share it had been getting. Project managers hope that lenders will advance enough money to complete its first leg in the San Joacim Valley; the plan is to repay the loans from the $1 billion annual cap-and-invest allocation.
Early this year, the Air Resources Board released new regulations to implement the legislative changes but faced criticism that they would increase consumer costs. That led to a revision in April that softens the rules’ impact — most obviously on refiners who have been threatening to leave California — but environmental groups are very critical.
The April version would also sharply reduce net revenues from emission auctions, according to the Legislative Analyst’s Office, providing barely enough for the $1 billion allocation to the bullet train and another $1 billion for the governor and Legislature to spend. Other programs that have been receiving cap-and-invest support, such as wildfire protection and housing, would probably get nothing.
The program has been tapped in recent years to backfill programs that a deficit-ridden state budget could not cover, so the projected revenue drop would exacerbate efforts by Newsom and legislators to close the state budget’s yawning gap.
“The (Greenhouse Gas Reduction Fund) is a relatively small portion of the overall state budget, but it has been a noteworthy source of funding for environmental and other programs in recent years,” the state Assembly’s budget advisor, Jason Sisney, says in an email. “Collapse of its revenues would change the state budget process noticeably. The state’s cost-pressured general fund seemingly would be unable to make up much, if any, of a significant (Greenhouse Gas Reduction Fund) revenue decline at this time.”
When Newsom presents his revised budget this week, he may reveal how he intends to cover the cap-and-invest program’s shortfall, particularly whether he will maintain the $1 billion bullet train commitment that project leaders say is vital to continuing construction of its Merced-to-Bakersfield segment.
It could boil down to bullet train vs. wildfire protection.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
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