The 2026-27 California Spending Plan

Human Services

Department of Developmental Services (DDS)

Overview

Projects Increased Spending. The spending plan provides $21.6 billion from all fund sources for DDS in 2026-27, an increase of 16 percent over revised 2025-26 expenditures ($18.7 billion). Of the total 2026-27 DDS budget, $21.1 billion is for the regional center system, $290 million is for the state-operated facilities program, and $190 million is for state operations. The spending plan for DDS does not include significant budget solutions.

The General Fund—which comprises 62 percent of the total DDS budget—provides $13.5 billion in 2026-27, an increase of 13 percent over revised 2025-26 General Fund expenditures ($11.9 billion). General Fund spending is increasing by about 14 percent for the regional center system and by about 10 percent for state operations. Most of the year-over-year growth in General Fund spending is due to a combination of caseload growth, changes in service utilization, and costs associated with scheduled increases to the state minimum wage. General Fund spending is decreasing by about 3 percent for state-operated facilities due to the reallocation of unfilled positions.

Projects Caseload to Continue Growing Rapidly. The spending plan assumes that regional centers will serve about 530,000 individuals in 2026-27 (about 56,000 infants and toddlers under age three, 450,000 individuals ages three and older, and 18,000 provisionally eligible children). This represents an increase of about 8 percent in total caseload compared to 2025-26. This growth assumption is generally consistent with historical trends. The spending plan assumes that state-operated residential and community facilities will have the capacity to serve about 300 individuals in 2026-27, the same number assumed in 2025-26.

New Spending

Approves Funding for Continued Planning of the Life Outcomes Improvement System (LOIS) Information Technology (IT) Project. DDS is undergoing a multiyear effort to modernize the IT systems used for case management and accounting in regional centers and state-operated facilities. We provide more details about the effort in our earlier report, The 2026-27 Budget: Department of Developmental Services. The spending plan provides $14.6 million one-time total funds ($5.7 million General Fund) to continue planning the new system, called LOIS. The spending plan also includes budget-related legislation directing the department to submit quarterly written updates to the Legislature on activities and expenditures related to LOIS until planning is complete.

Funds Implementation of a Recent Federal Rule. The federal government finalized the Home- and Community-Based Services Access Rule in 2024, which imposes a series of new requirements on states with staggered deadlines over the next several years. The spending plan provides $2.4 million ongoing total funds ($2.1 million General Fund) for state operations resources to implement the rule. The spending plan also increases regional center resources by $1.1 million total funds ($800 million General Fund) in 2026-27 and $2.2 million ($1.6 million General Fund) in 2027-28 and ongoing. The rule’s requirements include establishing grievance systems for home- and community-based services, reporting on service delivery timeliness, and establishing an advisory group on rates paid to direct care workers, among other items.

Supports Rate Increase for Certain Early Start Services. The spending plan increases regional center funding by $15 million total funds ($12.4 million General Fund) ongoing to update the provider rate methodology for early intervention services delivered outside the home. Part of the rate methodology for early intervention services is based on the location of service delivery. This change will increase rates for center-based programs to more accurately account for their operations.

Policy Actions

Increases Coordination Between DDS and the Department of Rehabilitation (DOR) for Employment Services. Budget-related legislation directs DDS and DOR to establish an interagency agreement intended to improve coordination for individuals with intellectual and developmental disabilities seeking employment services. The administration states that the agreement is intended to create a “no wrong door” approach that will reduce barriers for individuals seeking services. Under the existing system, the responsibility of navigating between DDS and DOR services is placed on individuals, which can result in interruptions to employment services. The interagency agreement is intended to reduce these interruptions for individuals served, as well as simplify administrative processes for providers of employment services. Statute requires DDS and DOR to develop the integrated system with input from the community by March 2029.

Establishes New Requirements for Regional Center Governing Boards. The spending plan updates some of the requirements for regional center governing boards with the intent to strengthen regional center governance. Beginning January 2028, governing board membership must reflect experience in state law, management, board governance, finances, and developmental disability programs. Also beginning January 2028, all governing board members must complete annual trainings provided by the department on topics including board management, ethics, performance evaluations, equity issues, and contract requirements. The spending plan also requires regional centers to provide adequate supports and accommodations so that individuals served can effectively participate in board discussions and decisions.

Allows Remote Delivery as an Option for Certain Services Through 2028. Budget-related legislation allows individuals to choose remote delivery for specified regional center services until December 2028, so long as remote delivery would meaningfully meet the individual’s needs. Statute establishes legislative intent that the authorization of remote services does not reduce access to in-person services or become a default choice. Additionally, statute directs DDS to track and report outcomes of remote services to assess whether they are working as intended to meet individuals’ needs. As part of this, statute requires DDS to submit quarterly updates to the Legislature on utilization of remote services.