California’s record $351.7 billion state budget, for the fiscal year that began this week, is drawing mixed responses from officials, policy advocates and stakeholders in Los Angeles County.
Some are breathing sighs of relief that the services they care about were spared funding reductions or saw expected cuts reduced or delayed, while others expressed disappointment that additional funding was not allocated for programs they see as vital.
Below are highlights of the statewide spending plan and its impact on L.A. County — from housing and homelessness programs to healthcare, preparations for the 2028 Olympics and wildfire recovery.
Housing and homelessness
Homeless services providers were, for the most part, celebrating after Gov. Gavin Newsom and the legislature restored $900 million to the state’s Homeless Housing, Assistance and Prevention program after funding was completely eliminated last fiscal year. Prior to that, the program was funded at $1 billion annually.
Newsom initially proposed $500 million in HHAP funding for the new fiscal year, but, following negotiations with legislative leaders, agreed to restore it to $900 million.
The L.A. County Department of Homeless Services and Housing called the funding “critical.”
Had statewide funding only been restored to $500 million — half of what has traditionally been allocated to HHAP — L.A. County would have been looking at a loss of approximately $30 million, the county’s HSH department said. Now, it anticipates receiving an estimated $75 million in HHAP funding this year.
“This restored funding is vital to sustaining housing and homelessness programs countywide and preventing service disruptions for our most vulnerable residents,” the department said in an emailed statement.
Although a number of homeless and housing advocates are breathing sighs of relief that most of the HHAP funding was restored, some also urged continued vigilance to ensure that progress doesn’t slide backward.
Jed Leano, a senior policy advisor with Inner City Law Center, a nonprofit law firm in L.A.’s Skid Row that serves the low-income and homeless populations, said it’s frustrating to see funding for homeless-related programs constantly in jeopardy. He worries that although the number of homeless people in L.A. and California has gone down in recent years, less funding would erase the progress that’s been made.
“When we look at homelessness in Los Angeles, one thing is crystal clear: We will never meaningfully reduce homelessness unless we get people from street homelessness into housing,” he said.
Healthcare
Healthcare was another area of the state’s spending plan that received lots of attention during recent budget talks, as state and local leaders grappled with major federal cuts to Medicare, which many low-income households and seniors rely on.
Complicating matters was the fact that in 2024, California expanded Medi-Cal coverage, the state’s version of Medicare, to all low-income Californians, regardless of immigration status. Because more people signed up for coverage than anticipated, it cost the state billions of dollars more than expected.
Between that and the federal cuts to Medicare — part of last year’s federal H.R. 1 bill — the plan now is to start transitioning, in the coming months, nearly 2 million Medi-Cal enrollees from a managed care health system to a fee-for-service system, a move that will largely impact undocumented immigrants.
Critics of the switch say managed care systems offer more coordinated, streamlined services and can help patients — including ones with language barriers — navigate complex health systems, whereas they’re more likely to be left on their own to figure out what they need or where they need to go under a fee-for-service plan.
“By fragmenting care and disrupting established provider relationships, it will make it more difficult for vulnerable residents to receive the coordinated, high-quality care they need,” said Martha Santana-Chin, CEO of L.A. Care Health Plan, the largest publicly operated health plan in the country.
“When people lose Medi-Cal coverage, their needs don’t disappear — they escalate,” she continued, adding that physicians, hospitals and community clinics would then be forced to respond to crises that could have been prevented.
Speaking of safety nets, the state budget included $250 million for the state’s 17 public hospital systems, which faced nearly $4 billion in federal and state cuts combined. The majority of those cuts stem from H.R. 1 healthcare cuts.
The majority of patients served by public hospitals are those enrolled in Medi-Cal or who are uninsured, though these hospitals also offer trauma and burn-care units and specialists that the general population, including those with private health insurance, rely on.
Katie Rodriguez, interim president and CEO of the California Association of Public Hospitals and Health Systems, said that the exact amount of the $250 million that will be allocated to the eight public hospitals in L.A. County is still being worked out. But given the large number of Medi-Cal patients these hospitals serve, she expects the funding to be proportional.
Rodriguez said the funding was critical to stave off layoffs and facility closures, but stressed that additional funding next year will be equally important to avoid closures and longer emergency room wait times.
“It’s going to be harder and harder to keep the same access to care in the future” without a longterm solution, Rodriguez said. “Definitely longer wait times, sicker people, less preventative care. There’s a real fear that people will die from lack of care. They (doctors) are already seeing people coming in much sicker. They’re not getting preventative care.”
On another note, the budget deal that Newsom reached with the legislature delays the elimination of Medi-Cal dental coverage for Californians ages 19 or older with “unsatisfactory immigration status” — which includes undocumented immigrants — until July 1, 2027. Their coverage was initially supposed to end this July.
In L.A. County, this delay means more than 498,000 individuals will continue to have dental coverage for another year, according to the county’s Department of Public Social Services.
Olympics preparations
In March, the 37-member Los Angeles County Legislative Delegation released its budget priorities for the upcoming fiscal year. State lawmakers representing the county requested over $1.3 billion to help the region prepare for hosting major sporting events such as next year’s Super Bowl at SoFi Stadium and the 2028 Summer Olympic and Paralympic Games.
That $1.3 billion ask included nearly $379.3 million for L.A. Metro to support a “transit-first” Olympic Games and long-term mobility improvements. That funding, according to a letter the delegation sent to legislative budget leaders in March, would pay for integrated regional traffic management systems, rail station upgrades, light rail system improvements and other projects.
But that funding for Metro was not included in the signed budget.
The transit agency said in an emailed statement that it was “disappointed.”
“The state’s support would assist Metro in building off its successful World Cup service delivery to bring millions of visitors to California in 2028 while keeping the nation’s economy moving,” the agency said.
“Metro remains committed to delivering a world-class transportation system for the 2028 Games,” the statement continued. “Preparing for an event of this scale requires significant operational investments beyond our existing resources, and we will continue working with the governor’s administration, the legislature, our regional partners, and LA28 to identify the funding necessary.”
In terms of funding for Olympics preparations, the L.A. County legislative delegation did score some partial victories.
It had requested $240.5 million for improvements to Exposition Park — which will host Olympic and Paralympic activities — to address “critical deferred maintenance,” including making the venue ADA accessible, and to fund safety and security needs.
While the delegation did not get the full amount requested, it did end up with $96.5 million — the same amount listed in the governor’s January budget proposal — for park improvements.
Wildfire recovery and rebuilding
The L.A. County legislative delegation had also requested $100 million from the state for recovery and community rebuilding efforts tied to last year’s Palisades and Eaton fires.
The majority of this funding, $70 million, had been requested for soil testing and remediation of hazardous materials.
Funds were also requested for water districts serving Altadena-area residents, libraries in Altadena and Pacific Palisades impacted by the fires and to establish an L.A. County Rebuild Authority to act as a central hub “to coordinate infrastructure, permitting, funding and community engagement.”
Although the state budget doesn’t include funding for these specific line items, there are plans for the state to create a $100 million disaster rebuilding fund to provide construction loans to homeowners seeking to rebuild after a disaster.
In addition, according to L.A. County Supervisor Kathryn Barger’s office, the state is advancing $216 million to the county to support two broad categories of work: to fund new recovery and resilience projects and to reimburse the county for costs incurred during last year’s wildfire response. The county will apply to FEMA to reimburse the state for the advanced funding.
Roughly $142 million of that advanced funding from the state will pay for utility undergrounding in the Eaton and Palisades burn areas to reduce future wildfire risk.
Other projects the county plans to use the money for include restoring Charles S. Farnsworth Park in Altadena, rebuilding the Altadena Senior Center and replacing water meters and fire hydrants in the Palisades area.
Barger said she appreciated the advanced funding from the state “so recovery work can continue without unnecessary delay.
“Every step that moves rebuilding forward brings us closer to restoring the communities that were so deeply impacted,” she said.