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By Nick Mordowanec
Staff Writer
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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.
Why It Matters
The elimination of these funds would deeply affect organizations such as Planned Parenthood, which relies on the money to serve low-income and marginalized communities. Prop 56 pays for family planning and women's health providers to make room for funding the voter-mandated Proposition 35, which expands Medi-Cal—California's Medicaid program financed equally by the state and federal government.
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What To Know
The $500 million reduction specifically targets incentive payments to health care providers that serve Medi-Cal patients.
These funds are primarily distributed through Proposition 56, a tobacco tax initiative approved by voters in 2016. The revenue was earmarked for expanding and improving access to Medi-Cal services, which serves about 15 million Californians.
Newsom's budget proposal, part of the governor's attempt to close a projected $12 billion budget deficit, would eliminate about half a billion dollars in Proposition 56 supplemental payments in the fiscal year 2025-26 and cancel an additional $900 million in planned increases in subsequent years, The Washington Post reported.
"Because of Prop 35 and the fact that it is burdened over the next 2 fiscal years by $4.6 billion, it's increased the budget deficit, we are trying to figure out ways of offsetting that," Newsom said, according to Oakland news station KTVU.
In a statement released Wednesday and referred to Newsweek, Planned Parenthood said cuts would slash the organization's annual budget in the state by one-third.
In addition to reproductive care, the organization said it's "gravely concerned" by proposed changes to the Medi-Cal expansion for undocumented people that would result in Californians losing health care coverage.
"With this May budget revision, Governor Newsom is effectively defunding Planned Parenthood in the state of California," Planned Parenthood Affiliates of California CEO and President Jodi Hicks said. "Make no mistake: this crushing proposal—the same morning Congress debated whether or not to defund Planned Parenthood nationwide—would immensely harm patients in California.
"As a result of these cuts, Planned Parenthood's ability to provide care would be severely impacted. Low-income Californians who depend on Planned Parenthood and other safety-net providers will endure longer wait times, have fewer appointment options, need to travel farther distances to access care, and will face even more barriers to accessing reproductive health care. To put it simply, these cuts are plain cruel."
She also wrote on X, formerly Twitter: "Happy to go on his Podcast and explain why this devastates women's health in his state."
Izzy Gardon, Newsom's director of communications, told Newsweek on Thursday that Prop 35 has added $4.6 billion to the state's budget deficit over the next two fiscal years.
"Proposition 35 created significant financial pressure on the state, requiring adjustments to how we balance the budget," Gardon said. "That said, the governor will work with the Legislature to respond to Planned Parenthood's concerns as we reinforce California's standing as the nation's leader in reproductive freedom. Freedom means access, and California delivers."
In separate remarks made to KCRA 3, Gardon called any suggestion for Newsom to sign a budget shutting down California health clinics "laughably absurd."
What People Are Saying
Planned Parenthood Affiliates of California wrote on X: "Here's what you need to know about @CAgovernor's May Budget Revision: 1. It decreases funding for sexual & reproductive health care providers by half a billion $. 2. It would eliminate 1/3 of PP in CA's annual funding. 3. It effectively defunds Planned Parenthood in CA."
California state Representative Maggy Krell wrote on X: "At a time when access to reproductive healthcare is under attack & Congress is proposing to defund Planned Parenthood & cut Medicaid, California must do more."
What Happens Next
Newsom and Democratic lawmakers remain under pressure to balance fiscal responsibility with maintaining California's progressive health care promises. The outcome of these budget negotiations will signal how the state prioritizes its most vulnerable residents in times of economic strain.
Updated 5/15/25, 4:48 p.m. ET: This story was updated with comments by Planned Parenthood and Newsom's office.
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