SACRAMENTO, Calif. — The California Legislature on Friday passed a budget to balance the state’s $12 billion shortfall. But the vote was not without disagreement as certain Democratic lawmakers remained opposed to it due to limits on health insurance for people with “unsatisfactory” immigration status.

For weeks, leaders in both the state Senate and Assembly have been working on an answer to Gov. Gavin Newsom’s May budget proposal. Newsom’s proposal surprised many in the Legislature with its changes to health insurance to certain immigrants, which includes undocumented immigrants and some with legal residence.

“Our budget proposal delays some of the most consequential cuts to allow for more time for the Legislature to consider alternatives and potential consequences,” said Assembly Budget Chair Jesse Gabriel, D-Encino. He added the budget process had been “a painful and at times, agonizing, process.”

After a few years of huge surpluses in 2021 and 2022, legislators in have been tasked with balancing significant deficits, including a roughly $45 billion deficit in 2024. According to the Governor’s Office, the main driver of the increased expenditures in 2025 has been Medi-Cal, California’s version of Medicaid, which is the largest cost to the state.

The governor’s budget proposal tried to address the ballooning expenditures by pausing Medi-Cal enrollment for undocumented immigrants, adding premiums for that population, and disallowing coverage for certain drugs, such as Ozempic, for weight loss.

The Legislature accepted many of these proposals, but delayed and lowered premium costs, and added stipulations to the enrollment freeze.

“This budget, in my estimation, started in a really bad place, and moved to a somewhat better place,” said Assemblymember Mia Bonta, D-Oakland. “It still does not do what we need it to do.”

However, while Bonta and some other colleagues in the Latino Legislative Caucus elected to approve the budget, saying it was a “first step,” and could be amended, others remained staunchly and vocally opposed.

“We can’t be party in creating a two-tiered healthcare system that sees others as less-than,” said Assemblymember Dr. Joaquin Arambula, D-Fresno.

Arambula was the only Democrat in the Assembly who voted ‘no’ on the budget.

State Sen. María Elena Durazo, D-Los Angeles voted ‘no,’ while and state Sen. Caroline Menjivar, D-Panorama City, declined to vote.

Menjivar said it was important for her to go back to her district and say: “I stood and fought for you because you asked me for this, because you look like me, because your community is my community, and we’re suffering right now.”

The San Fernando Valley lawmaker added that repeated assurances that people wouldn’t be disenrolled were misleading.

“People will lose Medi-Cal,” Menjivar said. “The savings would have to come from people actually losing Medi-Cal. That’s attributed to the churn rate.”

Under the Legislature’s proposal, people who become disenrolled will have 6 months to re-enroll.

The approval of the budget was mostly expected, as was Republican opposition. At the beginning of the Assembly floor session, Assemblymember Kate Sanchez, R-Trabuco Canyon, introduced a motion to make amendments to include Republican priorities.

Those priorities included more funding for Proposition 36, beyond the $110 million that was proposed, as well as more money for wildfire prevention and a rollback of Medi-Cal for undocumented immigrants.

The Republicans’ motion was summarily shut down by Assembly Majority Leader Cecilia Aguiar-Curry, D-Winters, and other Democrats.

This form of the budget is essentially a placeholder budget, and subsequent trailer bills are expected to change its final form.

The Governor’s Office also has a chance to weigh in again, and negotiations are expected to continue until a deadline of June 27.

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