Gov. Newsom Cuts Funds to…Planned Parenthood?

I did not see this one coming. Gov. Newsom is getting some angry pushback from Planned Parenthood over his new budget which would slash about half a billion in funding that goes to Medical providers.

California Governor Gavin Newsom’s proposed $322 billion budget for the 2025-26 fiscal year includes a $500 million cut to health care provider payments funded by Proposition 56, a move that Planned Parenthood says would significantly hinder its ability to offer essential health services across the state…

The $500 million reduction specifically targets incentive payments to health care providers that serve Medi-Cal patients.

Planned Parenthood is outraged. They have never had a problem getting money out of California before and now 1/3rd of their budget is in danger.

The CEO of Planned Parenthood Affiliates of California Jodi Hicks, who supported the passing of Prop 35, said the organization is outraged by the revised cuts, because they would slash Planned Parenthood’s annual budget in California by one-third. She also argues the cuts go against Governor Newsom’s promise to protect abortion access. 

“We called California the beacon of hope for anyone that needs health care, come to California. So it’s a little bit of whiplash that now we’re proposing these cuts,” said Hicks.

Predictably, Newsom said he is committed to abortion rights:

“I absolutely am committed to any adjustments that we can make in partnership with the legislature to address those anxieties in the spirit of our support that has historically been placed,” he said.

At this point you are probably asking yourself why is this happening in one of America’s bluest states? The answer to that question involves California’s budget which has been facing a big deficit of up to $12 billion dollars. And here’s where things get political very fast.

The reality is that Newsom has been borrowing money to keep the state going in the past few months after expanding Medical (California’s branding of Medicaid) to illegal immigrants last year. About twice as many migrants signed up as expected and the result was a big shortfall.

The cost estimate to provide coverage to all-income eligible undocumented immigrants was $6.4 billion in the 2024-25 state budget approved last summer, which marked an increase from earlier projections.

In February, the Newsom administration told lawmakers at a budget hearing at the state Capitol that the cost of expanding coverage to all immigrants for the current year had ballooned again from $6.4 billion to $9.5 billion. The California Department of Finance attributed the increase to “higher-than-anticipated enrollment, and higher pharmacy costs.”

The California Department of Finance took out a $3.4 billion loan from the general fund to cover the shortfall. That loan was only enough to cover the money needed through the end of March. The state had to request another $2.8 billion to cover the program through the end of the fiscal year.

We know this expansion of Medi-cal is a big part of the budget problem because just yesterday Newsom announced a pause on new enrollment. And here’s where Newsom’s usual brand of dishonest politics enters the picture. Instead of admitting this is a problem of his own making (which it clearly is) Newsome is blaming everything on the “Trump slump.”

California’s fiscal outlook has darkened since January, when Newsom projected a small surplus. The Los Angeles wildfires delayed tax filings from a county that is home to a quarter of California residents, and the state’s Medi-Cal insurance program — which under Newsom has expanded to cover undocumented immigrants of all ages — plunged into a deficit that has already forced the state to borrow billions as costs nearly doubled in the last decade.

But Newsom pinned the majority of the blame on oscillating White House trade policies that have upended global commerce and left many California businesses reeling…

“Best to describe this as a Trump slump,” the governor said.

What a bunch of horse hockey. As Ed pointed out yesterday, the tariffs have only been around for 6 weeks and for much of that time they were paused. But California was already borrowing money to cover the Medical budget hole weeks before any tariffs began. It was facing problems connected to the wildfires months before tariffs began. In short, this is partisan spin designed to shift blame rather than accept responsibility.

So to get back to Planned Parenthood, they are facing major Medical funding cuts largely because Newsom and Democrats decided to spend exorbitantly on expanding the program to illegal immigrants. Newsom can keep blaming that on Trump but the reality is that the state underestimated the potential cost and now it needs to cut back on spending, including its spending on Planned Parenthood.