California lawmakers are bracing for a budget shortfall of at least $10 billion next fiscal year, roughly the amount that the state spent in taxpayer money on health care for illegal aliens in the current fiscal year.

In February, state officials informed lawmakers that California has already spent $9.5 billion on Medi-Cal services to cover health care for illegal aliens. That prompted Governor Newsom to ask for a $6.4 billion emergency bailout from the state’s rainy day fund to cover expenses.

Now the governor is reportedly expected to announce a $10 billion deficit as the legislature heads into negotiating for the budget year that begins on July 1.

“What a fiscal coincidence: precisely the estimated cost of Gavin Newsom’s plan to extend state Medi-Cal to illegal immigrants,” the president of the conservative California Policy Center, Will Swaim, wrote on X.

The escalating cost for health care for illegal immigrants comes as the state’s Legislative Analyst’s Office warned last week of a “stagnant” and “fragile” economy. The office cautioned that the state’s budget remains reliant on an “unsustainable” stock market and might face significant risks if economic indicators trend downward.

“If hard economic data fall in-line with worrisome economic indicators, the state’s revenue outlook will turn more negative; however, recent history suggests this outcome is far from certain,” the analyst’s office wrote in its report. The agency noted shaky consumer sentiment but urged policymakers to consider the dual options of a potential economic downturn or better-than-expected growth.

As California struggles to solve its continuing budget crisis, the federal Department of Homeland Security has subpoenaed records from the cash assistance program for immigrants to determine if illegal aliens have received payments from American taxpayers through the Social Security Administration.

According to homeland security, more than 2 million ineligible illegal aliens received Social Security numbers in fiscal year 2024 alone.

“If you are an illegal immigrant, you should leave now,” the homeland security secretary, Kristi Noem, said in a statement. “The gravy train is over. While this subpoena focuses only on Los Angeles County — it is just the beginning.” 

She added that the Trump administration aims to “identify abuse and exploitation of public benefits and make sure those in this country illegally are not receiving federal benefits or other financial incentives to stay illegally.”

Last year, California was forced to close a $73 billion budget deficit with a combination of spending cuts, deferred expenses, accounting maneuvers, and reserve withdrawals. Now, rising Medi-Cal costs and the threat of federal funding cuts could leave the state billions of dollars short once again — even as tax revenues this year topped $4 trillion, making California the world’s fourth largest economy behind the United States, China, and Germany. California’s current budget is $279.9 billion, with federal spending projected to cover $171 billion of the total.

While Mr. Newsom lauded his state for setting the pace among the world’s largest economies, California is leading on a few unpleasant numbers as well. The state’s unemployment rate is 5.3 percent, the third highest in the nation, with more than a million jobless workers. In addition, California’s poverty rate is the nation’s highest and its homeless population is nearly 28 percent of the nation’s total.