The Assembly floor was buzzing with anticipation before the session at the state Capitol in Sacramento on March 28, 2025. A photo by Miguel Gutierrez Jr., CalMatters, captured the scene perfectly, setting the stage for what would be a crucial moment in California’s budget negotiations.
As California leaders and advocates geared up for prime budget talks, the stakes were sky-high. Governor Gavin Newsom’s updated proposal was expected to shed light on a looming shortfall, amidst a sea of uncertainty fueled by federal influences. With rising housing costs, persistent inflation, and new challenges like tariffs on the horizon, Californians were grappling with pressing and escalating needs.
The federal budget loomed large over the proceedings, with Congress and the president prioritizing cuts to essential services like health care and food, while showering the wealthy with billions in tax breaks. The upcoming May revision from Newsom needed to reflect the sense of urgency gripping Californians. This was no time to pit programs and people against each other. It was a time for leaders to prioritize the needs of the people and champion a vision for California that stood in stark contrast to the federal agenda.
For many Californians, particularly those with low incomes, this was not a theoretical debate about politics or intricate policy details. It was about the very real possibility of losing access to fundamental necessities like housing, healthcare, child care, and public transportation. The prospect of scaling back social supports during economic uncertainty only served to deepen inequality and make it harder for Californians to make ends meet.
In this critical moment, California needed to take the lead. State leaders had the opportunity to bolster revenue streams and create a fairer tax system, setting an example for the nation to follow. While California had a history of bold policymaking, other states were stepping up to safeguard their residents in the face of federal threats.
Take Minnesota, for example, where House members introduced the Protect Medicaid, Not Millionaires Act. This legislation aimed to generate new state revenue by taxing millionaires, ensuring that the state could offset potential cuts to federal Medicaid funding. By making taxes fairer for the wealthy and protecting vital health care for residents, Minnesota was taking proactive steps to shield its most vulnerable.
In New Mexico, a bipartisan group of state senators had set aside hundreds of millions of dollars in a Medicaid trust fund to support recipients in case of cuts to health care benefits at the federal level. Similarly, Washington state had approved a substantial revenue package to prevent deep cuts to services amid federal uncertainty. These measures included tax increases on high earners and large businesses, along with expanding the sales tax to new services and eliminating certain tax breaks.
While these approaches might not be a perfect fit for California, they offered inspiring examples of bold state action. Newsom and state legislative leaders were urged to follow suit, safeguarding California’s most vulnerable residents from mounting federal threats. This started with aligning tax and budget policies with the values of the state.
California currently handed out billions in tax breaks that predominantly benefitted corporations and high-income households. Closing these loopholes wasn’t just a matter of fairness; it was a fiscally responsible move that would help address the state’s budget challenges. In the weeks and months ahead, state leaders would face tough decisions. Would they prioritize programs that supported struggling families or uphold tax breaks for the wealthy? Would they work towards fairness or deepen inequality? Would they shield Californians from federal threats or inadvertently contribute to their harm?
As Congress pushed for unnecessary tax cuts for the wealthy, California needed to ensure it had the resources necessary to care for its people. The road ahead was filled with uncertainties, but one thing was clear: the decisions made in the coming months would have a profound impact on the lives of Californians across the state.
