Assembly subcommittee warns deep federal cuts would hit Medi‑Cal, schools, universities and counties

Summary

A California Assembly budget subcommittee heard testimony that proposed federal spending reductions and executive actions could force the state and local governments to absorb billions in costs, imperil Medi‑Cal coverage, university research and local services. The Department of Finance was asked to produce an assessment by April 1, 2025.

Chair Hart convened the California State Assembly Budget Subcommittee on Accountability and Oversight for a hearing focused on how proposed federal spending cuts and executive actions could affect state and local budgets and core services.

The Legislative Analyst’s Office, the Department of Finance, county and university officials and nonprofit budget analysts told the panel that the state stands to lose or see disrupted tens of billions of federal dollars that underpin health care, education, disaster response and research. "We are subsidizing the rest of the country right now," said Gabriel, emphasizing the risk if Washington reduces transfers to states.

The hearing featured an overview from Anne Hollingshead of the Legislative Analyst’s Office, who summarized federal funding flows and the scale of money tied to the state budget. Hollingshead said Department of Finance figures show roughly $171 billion in federal funds interact with the state budget in 2025–26, with about $134 billion of that for health and human services. The LAO estimated roughly $453 billion in federal flows to California in 2023…

Assembly subcommittee warns deep federal cuts would hit Medi‑Cal, schools, universities and counties

Summary

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