Overview of the Spending Plan

Appendix 2: General Fund Spending Solutions in the 2026‑27 Spending Plan

General Fund Spending Solutions (Fund Shifts) in the 2026‑27 Spending Plan
General Fund Spending Solutions (Reductions) in the 2026‑27 Spending Plan
General Fund Spending Solutions (Reversions) in the 2026‑27 Spending Plan
Other General Fund Solutions in the 2026‑27 Spending Plan

Appendix 2, Figure 1

General Fund Spending Solutions (Fund Shifts) in the 2026‑27 Spending Plan

Dollars in Millions

Department or Program	Description	2025‑26	2026‑27
CARB	Ongoing shift to special funds	—	$2
CalEPA	Ongoing shift to special funds	—	3
DHCS	Behavioral Health Services Fund offsets	—	102
DPH	Behavioral Health Services Fund offsets	—	67
DTSC	Ongoing shift to special funds	—	4
HBEX	One‑Dollar Premium Subsidy Program	—	20
HCAI	Behavioral Health Services Fund offsets	—	43
Medi‑Cal	Proposition 35 provider payment increases	—	1,742
Medi‑Cal	Proposition 35 behavioral health programs	$105	283
Medi‑Cal	Opioid Settlement Fund offsets	—	35
Medi‑Cal	Medical loss ratio remittance redirection^a	—	—
Totals		$105	$2,302
^aResults in $25 million ongoing savings beginning in 2027‑28.
CARB = California Air Resources Board; CalEPA = California Environmental Protection Agency; DHCS = Department of Health Care Services; DPH = Department of Public Health; DTSC = Department of Toxic Substances Control; HBEX = California Health Benefit Exchange; and HCAI = Department of Health Care Access and Information.

Appendix 2, Figure 2

General Fund Spending Solutions (Reductions) in the 2026‑27 Spending Plan

Dollars in Millions

Department or Program	Description	2025‑26	2026‑27
CalWORKs	Mental Health and Substance Abuse	—	$26
CDCR	Delayed activation of mental health facility	—	1
Child Care	Child care slot reduction	$75	52
Child Care	Cost‑of‑living adjustment reduction	—	48
Child Care	Prospective pay support	30	—
FTB	Savings from CalFile system due to discontinued federal program	—	1
Medi‑Cal	Work requirements and 6‑month renewals for adults with UIS	—	60
Medi‑Cal	Restructured Enhanced Care Management benefit	—	41
Medi‑Cal	Restructured Community Supports services	—	27
Medi‑Cal	End of comprehensive coverage for certain groups^a	—	—
Preschool	Align program costs	—	212
Preschool	Cost‑of‑living adjustment reduction	—	8
Totals		$105	$476
^aResults in over $900 million in ongoing savings beginning in 2027‑28.
Note: Budget includes a stricter Medi‑Cal asset limit for seniors and disabled adults resulting in a reduction of $349 million ($113 million in IHSS) in 2027‑28 increasing to $410 million ($153 million in IHSS) in 2029‑30 and ongoing. The budget reduces award coverage for Middle Class Scholarships (MCS) from 35 percent to 23 percent of students’ remaining financial need. Because the state pays for the MCS program in arrears, the $268 million in associated savings will not be realized until 2027‑28.
CDCR = California Department of Corrections and Rehabilitation; FTB = Franchise Tax Board; UIS = unsatisfactory immigration status; Preschool = State Preschool; CDCR = California Department of Corrections and Rehabilitation; DOJ = Department of Justice; and IHSS = In‑Home Supportive Services.

Appendix 2, Figure 3

General Fund Spending Solutions (Reversions) in the 2026‑27 Spending Plan

Dollars in Millions

Department or Program	Description	2025‑26
EDD	EDDNext	$71
Go‑Biz	America Design and Collaboration Facility	25
HCD	Encampment Resolution Funding program	1
Total		$96
EDD = Employment Development Department; Go‑Biz = Governor’s Office of Business and Economic Development; and HCD = Department of Housing and Community Development.

Appendix 2, Figure 4

Other General Fund Solutions in the 2026‑27 Spending Plan

Dollars in Millions

Solution Type	Description	2025‑26	2026‑27
Borrowing	Proposition 98 settle up	$3,940	—
Reserves	Suspend true up in 2025‑26	5,393	—
Revenue Related	Extend business tax credit cap	—	$1,000
Revenue Related	Renewed managed care organization tax	—	575
Revenue Related	Digital Software Tax	—	450
Totals		$9,333	$2,025
BSA = Budget Stabilization Account.