May 17, 2025

The 2025‑26 Budget

Initial Comments on the
Governor’s May Revision

Appendix 2:
General Fund Budget Solutions in the 2025-26 May Revision

Appendix 2, Figure 1

General Fund Budget Solutions in the 2025‑26 May Revision: Health

(In Millions)

Department or Program

Description

2023‑24

2024‑25

2025‑26

CDPH

Workforce development program

—

—

$3

DHCS

Behavioral health bridge housing

—

—

28

DSH

Incompetent to Stand Trial program

—

—

161

DSH

Isolation unit staffing

—

—

22

DSH

Community‑based diversion programs

—

—

12

DSH

Court reporting requirements

—

—

2

DSH

Incompetent to Stand Trial grant program

$233

—

—

DSH

Incompetent to Stand Trial evaluations

5

$5

—

HCAI

CalRx

—

—

45

Medi‑Cal

Proposition 35 support for base growth

—

—

1,289

Medi‑Cal

Payments to clinics for UIS population

—

—

453

Medi‑Cal

Long‑term care benefits for UIS population

—

—

333

Medi‑Cal

Proposition 56 dental supplemental payments

—

—

332

Medi‑Cal

Drug rebate aggregator

—

—

300

Medi‑Cal

Proposition 56 family planning supplemental payments

—

—

151

Medi‑Cal

Skilled Nursing Facility back‑up power

—

—

98

Medi‑Cal

Pharmacy step therapy protocols

—

—

88

Medi‑Cal

Enrollment freeze for adult UIS expansion population

—

—

86

Medi‑Cal

End of anti‑obesty drug coverage

—

—

85

Medi‑Cal

Higher HIV/cancer Medi‑Cal drug rebates

—

—

75

Medi‑Cal

Skilled Nursing Facility Workforce and Quality Incentive Program

—

—

70

Medi‑Cal

Medi‑Cal asset limit test

—

—

69

Medi‑Cal

Prior authorization for continuation of drug therapy

—

—

63

Medi‑Cal

Proposition 56 loan repayment program for 2025‑26

—

—

26

Medi‑Cal

Prescription drug utilization management

—

—

25

Medi‑Cal

Prior authorization for Medi‑Cal hospice services

—

—

25

Medi‑Cal

Proposition 56 women’s health supplemental payments

—

—

21

Medi‑Cal

Program of All‑Inclusive Care for the Elderly organization payments

—

—

13

Medi‑Cal

End of acupuncture coverage

—

5

Medi‑Cal

End of over‑the‑counter drug coverage

—

—

3

Medi‑Cal

Medi‑Cal premiums for adult UIS populationa

—

—

‑30

Totals

$237

$5

$3,852

aAdministration estimates a budget year cost to establish payment systems. There is estimated to be $1.1 billion in General Fund savings beginning in 2026‑27, increasing to $2.1 billion in 2028‑29.

CDPH = California Department of Public Health; DHCS = Department of Health Care Services; DSH = Department of State Hospitals; HCAI = Department of Healthcare Access and Information; and UIS = unsatisfactory immigration status.

Appendix 2, Figure 2

General Fund Budget Solutions in the 2025‑26 May Revision: Human Services and Housing

(In Millions)

Department or Program

Description

2024‑25

2025‑26

Child Care

Child care COLA suspension

—

$61

Child Care

Emergency Child Care Bridge reduction to align with recent expenditures

—

43

Child Welfare

Family Urgent Response System reduction to align with recent expenditures

—

13

DDS

Rate reform hold harmless

—

75

DDS

Direct support professional workforce training and development

—

18

DDS

Implicit bias training at regional centers

—

6

DDS

Health and Safety Waiver assistance at regional centers

—

3

HCD

Reversion of unspent prior‑year funds from three programs

$32

—

DHCS and DSS

Various operational savings

—

75

IHSS

Provider overtime and travel time hours cap

—

708

IHSS

End of IHSS for individuals age 19+ with UIS

—

159

IHSS

Community First Choice Option late penalties

—

81

IHSS

Medi‑Cal asset test

—

26

Totals

$32

$1,265

COLA = cost‑of‑living adjustment; DDS = Department of Developmental Services; HCD = Department of Housing and Community Development; DHCS = Department of Health Care Services; IHSS = In‑Home Supportive Services; and UIS = Unsatisfactory Immigration Status.

Appendix 2, Figure 3

General Fund Budget Solutions in the 2025‑26 May Revision: Resources and Environment

(In Millions)

Department or Program

Description

2024‑25

2025‑26

CalFire

Operational costs shift to GGRF

—

$1,541

CalFire

Training center funding reversion

$31

—

CEC

Demand side grid support shift to Proposition 4

—

18

CEC

Offshore wind shift to Proposition 4

43

—

CPUC

Community renewable energy generation

33

—

DTSC

Exide facility and residential cleanup

35

—

DWR

Dam safety shift to Proposition 4

—

47

DWR

Systemwide flood risk reduction shift to Proposition 4

—

15

DWR

Less frequent groundwater basin reporting

—

1

Parks

Stewardship of state‑owned lands shift to Proposition 4

—

68

Parks

Deferred maintenance shift to Proposition 4

—

14

SWRCB

Water recycling shift to Proposition 4

—

51

WCB

Watershed climate resilience shift to Proposition 4

—

32

Totals

$142

$1,787

CalFire = California Department of Forestry and Fire Protection; GGRF = Greenhouse Gas Reduction Fund; CEC = California Energy Commission; CPUC = California Public Utilities Commission; DTSC = Department of Toxic Substances Control; DWR = Department of Water Resources; Parks = Department of Parks and Recreation; SWRCB = State Water Resources Control Board; and WCB = Wildlife Conservation Board.

Appendix 2, Figure 4

General Fund Budget Solutions in the 2025‑26 May Revision: All Other

(In Millions)

Department or Program

Description

2023‑24

2024‑25

2025‑26

CDCR

Unallocated operational improvements

—

—

$125

CDCR

CalAIM Justice‑Involved Initiative program support

—

—

6

CDE

2024‑25 Proposition 98 payment delay

—

$1,315

—

EE Comp

Reduction to state employee compensation

—

—

283

Judicial

Trial Court Trust Fund unrestricted fund balance

—

—

38

Judicial

Court Facilities Architectural Revolving Fund reversions

—

—

34

Judicial

Pretrial release program

—

20

20

Judicial

Jury duty pilot program

$14

13

—

LCI

Extreme heat/community resilience shift to Proposition 4

—

—

15

LCI

California Education Learning Lab elimination

—

—

5

Local Government Mandates

Regional water quality control boards mandate suspension

—

—

3

School Facility Program

School Facilities Program General Fund reversion

—

178

—

State Preschool

State Preschool COLA suspension

—

—

10

State Treasurer

California Hope, Opportunity, Perseverance and Empowerment

—

—

50

UC

Affordable student housing (debt service savings)

—

—

4

Totals

$14

$1,526

$594

CDCR = California Department of Corrections and Rehabilitation; CalAIM = California Advancing and Innovating Medi‑Cal; CDE = California Department of Education; EE Comp = employee compensation; LCI = Governor’s Office of Land Use and Climate Innovation; and COLA = cost‑of‑living adjustment.

Appendix 2, Figure 5

General Fund Revenue‑Related and Cost Shift Solutions in the 2025‑26 May Revision

(In Millions)

Solution Type

Description

2024‑25

2025‑26

Revenue Related

Single sales factor for financial institutions

—

$330

Cost Shift

Special fund loans

—

550

Cost Shift

Medical Providers Interim Payment Fund Loan

$2,150

1,291

Cost Shift

Behavioral Health Services Fund

40

100

Totals

$2,190

$2,271