The 2026-27 Budget

Proposed Elimination of State Environmental Positions

Summary

The Governor’s budget includes the permanent elimination of certain vacant state positions in environmental departments to generate budgetary savings, initially proposed as part of the 2025-26 budget but delayed subject to further legislative review. In January, the Legislature indicated it did not agree with eliminating 349 of these positions. If eliminated, they would generate annual savings of $45 million ($19 million from the General Fund and $25 million from special funds). We find that eliminating certain positions could have undesirable programmatic impacts because they serve important purposes, even if they happen to be vacant for a period of time. In addition, we find an important distinction between positions funded by the General Fund versus special funds. Maintaining the former would erode General Fund savings the Governor built into the 2026-27 budget proposal (and thus likely would require finding a commensurate level of savings elsewhere). In contrast, maintaining special-funded positions would have no direct impact on the General Fund condition. We recommend the Legislature maintain the special-funded environmental positions it identified in its review (216 of the total 349). While the Legislature also may prefer to maintain the 133 General-Funded environmental positions, we suggest it weigh the importance of those positions against other budget priorities given projected General Fund deficits in 2026-27 and out-years.

Background

Governor and Legislature Agreed to Eliminate Roughly 5,000 Vacant State Positions. To achieve budgetary savings, the 2025-26 budget eliminated 4,994 vacant state government positions, reducing annual costs by about $360 million on an ongoing basis. These savings included about $130 million General Fund, with the remainder from special funds. This action reflected intent from the 2024-25 budget agreement, however, it achieved far less savings—only about one-quarter—than originally envisioned once the administration put forth department-specific reduction proposals (rather than nonspecific aggregate estimates). Our State Spending Plan posts from 2024 and 2025 provide more information about this effort to realize budgetary savings and the sequence of events.

Legislature Was Given More Time to Consider About 1,000 Residual Positions That the Governor Had Proposed to Eliminate. In May 2025, the administration proposed permanently eliminating 6,002 positions. The final budget agreement instead eliminated fewer positions (4,994) and provided the Legislature additional time to review 1,009 additional positions which we refer to as “residual:” (1) those associated with implementing legislation chaptered in 2022 and 2023 across numerous departments, and (2) all of those in nine specified departments which we highlight in Figure 1. The agreement gave the Legislature—through the Joint Legislative Budget Committee (JLBC)—until January 1, 2026 to review and potentially “nonconcur” with the elimination of these residual positions. (The state continues to accrue savings while these positions remain vacant, even if they have not yet been permanently eliminated.)

JLBC Did Not Concur With the Elimination of About Two-Thirds of Residual Positions. In December 2025, JLBC informed the administration that it did not concur with the elimination of 650 positions out of the 1,009 residual positions it reviewed. In its letter to the administration, JLBC cited the various criteria upon which it based its review, which aimed to ascertain the potential negative impacts that eliminating these positions might have on a department’s ability to implement key priorities. For example, JLBC reviewed whether any of the positions proposed for elimination perform important public safety roles or provide direct client or constituent services.

Majority of Residual Positions Were in CNRA and CalEPA Departments, CDFA, and CPUC. Among the 4,994 positions eliminated in the 2025-26 budget agreement, less than 10 percent (378) fell within the California Natural Resources Agency (CNRA) and California Environmental Protection Agency (CalEPA) departments, the California Department of Food and Agricultural (CDFA), and the California Public Utilities Commission (CPUC). (We refer to these as “environmental positions.”) By contrast, as shown in Figure 2, environmental positions comprised a majority of the residual positions reviewed by the Legislature (565 of 1,009) and of the positions the Legislature did not agree to eliminate (349 of 650). (The remaining residual positions span across 14 non-environmental departments, with most at the Department of Industrial Relations and Department of Veterans Affairs.)

Governor’s Proposal

Includes Savings From Elimination of All Residual Positions. The Governor’s budget released in January assumes all the residual positions are eliminated and, accordingly, scores associated annual savings in both 2025-26 and 2026-27. For environmental positions, this amounts to annual savings of about $71 million (about $32 million General Fund). (For context, the budget assumes total savings of $487 million—$191 million to the General Fund—in 2026-27 and ongoing from the 6,002 positions.) (We note that the timing of the JLBC letter was such that the administration would not have been able to incorporate the Legislature’s nonconcurrence into its 2026-27 budget proposal, even if it agreed to maintain those positions.)

Assessment

Maintaining Positions Would Erode Savings Administration Assumed in the Governor’s Budget… The Legislature did not concur with the elimination of 650 positions from the Governor’s original proposed amount, including 349 environmental positions. As such, the Governor’s proposal is not consistent with the priorities the Legislature expressed through the JLBC letter. However, if departments were able to retain and fill these positions, the budget would not achieve the associated level of savings assumed in the Governor’s budget. Consequently, if the Legislature wishes to retain the positions as part of its final budget package, it likely will need to find a commensurate level of savings elsewhere in the budget, at least for those positions supported by the General Fund.

…However, Maintaining Special-Funded Positions Would Not Directly Affect General Fund Condition. JLBC did not concur with the elimination of 349 environmental positions. Of these, a majority—about 216—receive special fund support, while about 133 receive General Fund support. If all of these positions ultimately are eliminated—as the Governor proposes—they would generate $19 million in General Fund savings and $25 million in special fund savings. Depending on their balances and constraints, certain special funds can be tools to help address a budget deficit, such as by providing loans to the General Fund or taking on expenditures previously funded by the General Fund. However, in many cases, the residual positions in question supported by special funds do not have a direct impact on the General Fund and thus do not factor directly into efforts to balance the budget. Consequently, if the goal of eliminating vacant positions is to address the state’s structural imbalance, in many cases, applying this approach to special-funded positions will not help. Rather, the primary fiscal results of this action will be larger reserves of unspent monies in these funds. Moreover, often special funds administered by CNRA and CalEPA departments, CDFA, and CPUC are structured specifically to ensure fee-payers help support regulatory activities and the mitigation of their industry’s environmental impacts. As such, reducing positions and expenditures could mean that funds—at least in the near term—end up sitting unused in account balances rather than supporting the activities that fee-payers have paid the state to undertake.

Eliminating Certain Positions Could Have Undesirable Programmatic Impacts. The environmental positions proposed to be eliminated were authorized to serve important state functions, including related to preserving health and safety and enforcing state laws. This was one of the key arguments JLBC cited for opposing their permanent elimination. For example, at the California Department of Fish and Wildlife (CDFW), positions include game wardens who provide important law enforcement and wildlife and resource protection services. Some CDFW positions also administer various permits, a key function to ensure that projects—from habitat restoration to infrastructure and housing development—can be completed with less damage to the environment. Positions proposed for elimination at the Department of Parks and Recreation include public safety officers and staff protecting environmental, cultural, and historical resources. At the State Water Resources Control Board, positions include staff who help regulate waste discharge into waters of the state, including drinking water sources. Eliminating these positions consequently would come with serious trade-offs.

Positions May Address Important Needs Despite Being Vacant. The administration targeted vacant positions to achieve budgetary savings. Eliminating a vacant position may appear to have less of an impact on a department than eliminating a filled position. However, positions can be vacant for a number of reasons. For example, in the case of recently enacted legislation, departments likely had not yet had time to hire staff and still were in the initial process of filling the newly established positions when the Department of Finance determined that the positions would instead be eliminated. Additionally, positions can be vacant due to recruitment challenges, labor market constraints, or operational or practical considerations (for example, a department may still be filling a position after a recent employee departure), rather than as an indication of reduced program workload. While such challenges can lead to delays in filling positions, they do not mean these roles will not eventually be filled, nor that the responsibilities such staff perform are not important. While eliminating vacancies could appear to be an easy way to achieve ongoing budgetary savings, in some cases doing so could undermine environmental departments’ long-term capacity and ability to achieve the goals and tasks laid out for them in state law.

Recommendations

Maintain Special-Funded Environmental Positions Identified by JLBC. We recommend the Legislature reject the elimination of 216 environmental positions supported by special funds that JLBC identified in its nonconcurrence letter to the administration. The costs associated with these positions—totaling $25 million—would begin to accrue as positions are filled. We find several compelling reasons for maintaining these positions. As described above, these positions serve important purposes and eliminating them could have negative programmatic impacts. Many of these positions may be vacant because they are hard to fill or for point-in-time circumstances, and not because they lack importance. Moreover, the fees used to pay for many of these positions were designed specifically to support the regulation and mitigation of industry’s environmental impacts. Through JLBC, the Legislature already expressed its preference for maintaining these positions and doing so would not have an impact on the General Fund condition.

Weigh Importance of General-Funded Environmental Positions Against Other Budget Priorities. For the 133 General-Funded environmental positions identified by JLBC in its nonconcurrence letter, we recommend the Legislature consider the relative merits within the context of its overall budget architecture. Although many of the same arguments apply about the programmatic importance of these positions, maintaining them will have an impact on the General Fund condition (about $19 million) and could require the Legislature to identify other budgetary reductions to accommodate their support. If the Legislature were to maintain these positions, costs would not accrue until the positions are filled. Consequently, the total 2026-27 cost likely would be less than $19 million.