Newsom budget cuts spending but boosts Malibu fire aid Play

California Governor Gavin Newsom's new budget for the state cuts spending in many areas — but it still designates special money to fire victims in Malibu, the Palisades and Altadena.

The governor yesterday unveiled his new budget at a long news conference in Sacramento. He said Palisades Fire and Franklin Fire victims who lost their houses will get grants up to $100,000 to cover their mortgages. Not loans — grants.

"So a family earning up to 281 thousand a year can get a grant not a loan up to $100,000 for 12 months to address their mortgage needs," Newsom said. "Over 1,000 families have already taken advantage of this. They thought it was too good to be true."

The governor also wants a second new state program aimed specifically at fire victims in Malibu, the Palisades and Altadena. This is a proposal for a $100 million taxpayer-funded account to help wildfire victims scrape together enough money to rebuild, even though they are in most cases woefully underinsured.

This proposed fund would guarantee lenders that fire victims would pay off the loans necessary to bridge the gap between what they've got and what they need to rebuild. The state guarantees will substantially lower the interest and substantially increase the number of construction loans going out, the governor says.

At his news conference in Sacramento yesterday, Newsom said construction costs are spiraling out of control because of decisions made in Washington.

The updated budget plan shows California has erased its projected deficit for the next two years. This is thanks to billions of dollars in additional tax revenue tied to Silicon Valley's artificial intelligence boom.

But the windfall is unlikely to offset tens of billions of dollars in health care cuts signed into law by President Donald Trump last year, which are expected to push millions of Californians off their health insurance and could force county health systems to slash crucial services.

This week, Vice President J.D. Vance announced the Trump administration will also withhold $1.3 billion in Medicaid payments to the state.

Newsom accused the White House of using racist reasoning to cut payments to the poor. And he accused fellow governors of trying to redistrict Black congressional representatives out of existence.