SACRAMENTO — California is bracing for a much smaller budget surplus next year because of its ongoing feud with the Trump administration about a tax involving Medicaid, the state’s chief budget writer said Monday.
California is projected to have a $7 billion surplus, with $3 billion of it available to spend on recurring programs.
But nearly $2 billion of that amount would only come if California is allowed to keep in place a tax on the companies that manage its Medicaid program. California needs permission from the federal government to do that, and state lawmakers are not sure they will get it.
Democratic state Assemblyman Phil Ting, chairman of the committee that writes the Assembly version of the budget, said lawmakers are planning on Trump not approving the tax, meaning the surplus would drop to $4 billion, of which $1 billion would be available to spend on recurring programs.
Preparing to spend that money while facing such uncertainty “wouldn’t be the right thing to do,” Ting said.

Ting Indicated It Could Be Difficult to Accomplish All of Those Things

“Every time there is an opportunity to fight with California, the Trump administration has really taken up that mantel and really tried at every turn to thwart many of our key policy agendas,” Ting said.

California has battled with the Trump administration this year over whether the state can set its own emission standards for cars and trucks and over proposed new rules governing the state’s scarce water. Democratic Attorney General Xavier Becerra has sued the administration more than 50 times over various administrative actions.
Ting’s comments came as he released his annual blueprint for upcoming state spending. Ting said he wants the state to spend more money on mental health treatment for homeless people and prison inmates. H also wants the state to let low-income adults 65 and older who are living in the country illegally be eligible for the state-funded health insurance program.
Ting indicated it could be difficult to accomplish all of those things if the state only has $1 billion in new money that lawmakers can spend on recurring programs.
“A billion dollars goes really quickly when you’re talking about higher education, health care, housing the homeless,” Ting said.