Other states are showing California how to protect its budget without cutting needed services

As California leaders and advocates enter prime budget negotiations, the stakes couldn’t be higher. Gov. Gavin Newsom’s revised proposal may soon provide clarity, revealing an expected shortfall and a lot of uncertainty driven by federal leaders. 

At the same time, Californians are facing real and growing needs, driven by rising housing costs, persistent inflation and new pressures like tariffs. 

We’re also still waiting to see what happens with the federal budget, as Congress and the president make it a priority to cut health care, food and other vital benefits, while spending billions on tax cuts for the rich. 

Newsom’s May revision must reflect the urgency that Californians are feeling. This is not the time to pit programs and people against each other. It is time for leaders to put people first and advance a vision for California that lies in stark contrast to that of federal leaders. 

For many Californians — especially those with low incomes — this is not a debate about politics or complex policy. It’s about whether they will continue to have access to housing, local hospitals, health care, child care, public transportation, food and other basic needs. 

Scaling back social supports during economic uncertainty only worsens inequality by making it harder for Californians to cover basic expenses and live with stability. Voters across the state see this as a serious and growing concern. 

In this environment, California must lead. State leaders can do this by boosting revenue streams and making the tax system more fair. 

California has often led the nation in bold policymaking. But in this moment, other states are stepping up to protect their residents.

In Minnesota, for instance, House members introduced the Protect Medicaid, Not Millionaires Act, which would raise new state revenue through a tax on millionaires, allowing the state to offset lost federal Medicaid funding if cuts are enacted. This would make taxes more fair for millionaires, who stand to reap huge benefits under the federal budget proposal, while preventing state residents from losing vital health care. 

In New Mexico, a bipartisan group of state senators has earmarked hundreds of millions of dollars in a Medicaid trust fund to support the state’s recipients if Congressional Republicans are successful at slashing health care benefits for millions of Americans. 

And in Washington state, the legislature approved an $8.7 billion revenue package to help balance the budget and prevent deep cuts to services amid federal uncertainty. The measures raise taxes on high earners and large businesses through increases to the capital gains tax, estate tax and business taxes, while expanding the sales tax to new services and eliminating certain tax breaks.

These approaches may not be tailor-made for California, but they offer compelling examples of courageous state action. 

Newsom and state legislative leaders should take steps through this year’s budget to protect California’s most vulnerable against mounting federal threats. That begins with aligning tax and budget policy with our values. 

California gives away billions annually through tax breaks that primarily benefit corporations and high-income households. Closing these loopholes is not only fair — it’s fiscally responsible. 

The coming weeks and months will test state leaders. Will they protect the programs that keep families afloat or preserve tax breaks for the wealthy? Will they advance fairness or deepen inequality? Will they defend Californians against federal threats or enable the harm? 

As Congress prioritizes unnecessary new tax cuts for the wealthy, California must ensure it has the resources needed to take care of its people.