Labor groups, still reeling from the return-to-office order, will soon need to negotiate suspending salary increases to help reduce California’s deficit.

NEW YORK -- Gavin Newsom hosts President Donald Trump's allies on his podcast. He's pushing city officials to crack down on homeless encampments. And this week, he proposed limiting health care coverage for immigrants in the country illegally.

The revised budget that Governor Gavin Newsom released Wednesday does not include direct funding for Proposition 36 — just like in January.

Gov. Gavin Newsom said Wednesday morning that California is facing a shortfall of $12 billion for the upcoming budget year. Newsom’s office blamed the deficit on economic uncertainty caused by President Donald Trump’s policies and likely cuts to Medicaid. The overall budget, if passed by the Legislature by June 15, would top $321 billion.

California would scale back state Medicaid coverage for immigrants without legal status, eliminate coverage for certain weight loss drugs and use money from a key climate program to help fund state fire response under a $322-billion budget proposal announced Wednesday by Gov.