California Gov. Gavin Newsom signed a budget emergency proclamation, authorizing the state to access $17.6 billion in its budget stabilization account as he signed a record $321 billion budget.
In the 2018-2019 fiscal year, the last year before Newsom’s governorship, the state budget was $201 billion, meaning the state’s budget has grown 60% over the last five years while the population has slightly declined.
“Largely due to the federal government’s sweeping tariff policy, the 2025 May Revision forecast of the California economy projects a period of below-trend growth and rising unemployment (‘growth recession’) and a General Fund revenue forecast downgrade by $5.2 billion in fiscal years 2023-24 through 2025-26,” wrote the governor.
While Newsom’s order blames the Trump administration for the state’s economic slowdown, federal data shows California lost a net 80,300 jobs in 2024, and had shed 173,000 private-sector jobs between January 2023 and December 2024, suggesting the state’s economic woes predated the Trump administration.
38.2% of Californians are so low-income they qualify for Medi-Cal, which has a monthly income threshold of $1,801, or $21,612, or about half of what one would make working at a fast-food restaurant full-time.
In March, nearly half of all new jobs were from the state’s In Home Supportive Services program, a welfare program by which disabled or elderly Medi-Cal beneficiaries use taxpayer money to employ household members for up to 70 hours a week for household tasks, including a boost for overtime pay.
Nearly three quarters of a million Californians are now classified as employed IHSS providers.
