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Prepared by Precision Advocacy
The legislature is beginning to shift fully into the policy phase of the 2026 session while budget activity continues to accelerate. Policy committees are starting to hear bills, and by the end of March legislative hearings are expected to be in full swing. At the same time, budget subcommittees have begun examining key components of the governor’s proposed 2026-27 budget, with a particular focus on large health and human services programs that make up the majority of state spending.
Recent hearings and fiscal analyses highlight that lawmakers are increasingly focused on program accountability, long-term fiscal sustainability, and the ability of local governments to implement state policy changes. Counties remain central to the delivery of many of these services, particularly in juvenile justice realignment, child support administration, public health response, and Medi-Cal program implementation.
For counties such as Orange County, these conversations carry direct implications for local service delivery, health systems, and public safety infrastructure. Rising Medi-Cal costs, evolving juvenile justice responsibilities, changes to federal Medicaid policy, and shifts in the state prison system all point toward a continued trend of expanded local implementation responsibilities paired with heightened legislative oversight.
The following summary provides an overview of the key issues raised in recent hearings and budget analyses and highlights potential implications for Orange County.
Senate Budget Hearing on Juvenile Justice, Child Support, and Public Health
On February 26, the Senate Budget Subcommittee on Health and Human Services held a hearing examining several key programs within California’s health and human services system, including the Office of Youth and Community Restoration (OYCR), the Department of Child Support Services (DCSS), and the California Department of Public Health (CDPH). The discussion focused on both progress and ongoing challenges as the state continues implementing major policy changes while navigating fiscal uncertainty. Across the hearing, legislators emphasized accountability, data tracking, and the need to ensure that local governments have the capacity to carry out new responsibilities. The conversation also underscored the growing pressures on the state’s health and human services system, which now represents nearly 59% of the state budget.
Juvenile Justice Realignment. A significant portion of the hearing focused on the Office of Youth and Community Restoration and its 2025 Department of Juvenile Justice Realignment Report. The report outlines the state’s transition from state-run youth incarceration to county-based systems under SB 823 (2020). OYCR officials explained that while the state has successfully transferred responsibility for high-need youth to counties, the level of readiness and program quality varies considerably across jurisdictions. The report emphasizes that youth outcomes tend to improve when young people remain closer to home, maintain family connections, and receive individualized rehabilitation plans grounded in positive youth development. At the same time, OYCR acknowledged several challenges, including uneven facility readiness, staffing shortages, infrastructure gaps, and limited statewide data systems to track long-term outcomes. Counties are continuing to convert legacy juvenile facilities into Secure Youth Treatment Facilities, and the success of the realignment model depends heavily on stable funding and continued program development.
Legislators also raised questions about whether the realignment model has led to “net widening,” meaning more youth being placed in custody. OYCR responded that current Secure Youth Treatment Facility commitments average about 333 youth statewide, which is nearly identical to the 334 youth housed in state DJJ facilities prior to realignment. While the state maintains that commitment levels have not significantly increased, lawmakers indicated they will continue closely monitoring youth commitment trends and rehabilitation outcomes. Funding stability also emerged as a concern. OYCR reported that federal Title II juvenile justice grants remain uncertain due to delayed solicitations and administrative changes. Because these funds support prevention and community-based programming, uncertainty could affect county service planning. In addition, the state is preparing to implement a revised Juvenile Justice Realignment Block Grant formula beginning July 1, 2026, which may affect future county allocations.
Child Support Services. The Subcommittee then turned to the Department of Child Support Services, where the central issue was administrative funding for local child support agencies. The governor’s budget proposal restores $17.65 million in total funds, including $6 million from the General Fund, to help rebuild administrative capacity following several years of funding freezes and reductions. However, legislators questioned whether restoring funding is appropriate as statewide caseloads decline. The Legislative Analyst’s Office explained that the program’s funding structure is designed to maintain a staffing ratio of roughly 180 cases per worker while accounting for rising operating costs and technology upgrades. The discussion highlighted the tension between fiscal restraint and maintaining stable services for families.
Lawmakers also discussed California’s child support pass-through policy for families receiving CalWORKs. Currently, the state passes through up to $100 per month for families with one child and $200 for families with two or more children, totaling roughly $2 to $2.7 million per month statewide. California has also passed through approximately $200 million to formerly assisted families under a federal option. While the policy is intended to improve economic stability for families, legislators acknowledged that expanding pass-through benefits could increase administrative workload for local child support agencies and may require additional resources.
Department of Public Health. The hearing concluded with a discussion of the 2026 State of Public Health Report presented by the California Department of Public Health. The report describes a public health landscape shaped by emerging threats, including potential federal funding reductions, climate change impacts, an aging population, and behavioral health challenges. While life expectancy and overall mortality have improved since the COVID-19 pandemic, the report highlights troubling trends among younger adults, where death rates have increased largely due to behavioral health issues and drug overdoses. Pregnancy-related mortality has also worsened in recent years, and rural regions of the state continue to experience higher mortality rates across several health categories.
The report places particular emphasis on early childhood health interventions, behavioral health access, and improved preparedness for climate-driven health risks. CDPH officials stressed that local public health departments serve as the front-line during emergencies and warned that reductions in federal funding could weaken outreach, staffing, and system capacity across the state. The report also highlights expanded data reporting on race and ethnicity, maternal mental health, food security, and emerging infectious diseases such as H5N1. Additionally, state officials noted that California has taken steps to maintain specialized suicide prevention support within the 988-crisis hotline system after federal LGBTQ+ youth-specific services were eliminated in 2025, including a partnership with The Trevor Project to strengthen training and support.
Taken together, the hearing reflected a legislature that continues to support youth rehabilitation, family economic stability, and strengthened public health systems while increasing scrutiny over program outcomes and spending. Counties remain central to the implementation of many of these policies, particularly in juvenile justice realignment, child support administration, and public health emergency response. At the same time, lawmakers signaled continued oversight of youth commitment levels, administrative efficiency in child support programs, and the readiness of local public health infrastructure. As the state faces uncertainty around federal funding and rising service demands, counties will likely need to continue adapting programs, improving data reporting, and coordinating across health, probation, and social service systems to meet evolving state expectations.
Background
Legislative Analyst’s Office: Medi-Cal Budget
The Legislative Analyst’s Office (LAO) analysis on the Medi-Cal budget highlights growing fiscal pressure in Medi-Cal that will affect managed care plans, safety-net providers, and county health systems that serve large low-income populations.
The governor’s proposed 2026-27 budget assumes Medi-Cal spending will reach roughly $222 billion total funds, including about $49 billion General Fund, continuing a decade-long trend where Medi-Cal spending has more than doubled and grown faster than the overall state budget. Much of this growth is not driven by enrollment increases but by higher costs per enrollee, including greater service utilization, rising provider rates, expanded benefits, and pharmacy spending.
For Orange County, this trend means that managed care systems such as CalOptima Health will continue operating in an environment of rising utilization and cost pressure, particularly in areas like hospital care, behavioral health services, and prescription drugs. The LAO notes that pharmacy costs alone have grown about 13% per enrollee annually in recent years, becoming one of the largest drivers of spending growth.
The report also identifies federal Medicaid changes under H.R. 1 that could significantly reshape enrollment and eligibility beginning in 2026-27. These include new work or community engagement requirements and more frequent eligibility redeterminations, which the administration estimates could lead to hundreds of thousands of Medi-Cal disenrollments statewide. For Orange County, this could reduce enrollment in the short term but may also increase churn and administrative workload for county eligibility systems.
Another issue with potential local implications is the state’s reliance on provider taxes, including the Managed Care Organization (MCO) taxes and hospital fees used to finance Medi-Cal. Federal changes will require California to restructure these taxes and may reduce the revenue they generate in the coming years. Because these taxes support both provider rate increases and General Fund savings, changes could indirectly affect funding levels available to health systems and managed care plans serving Orange County residents.
Finally, the LAO emphasizes that the legislature currently lacks detailed data on several key spending drivers, including costs associated with undocumented beneficiaries and managed care expenditures. The LAO recommends requiring the administration to provide more granular data to improve legislative oversight, particularly as the state considers future cost-containment strategies.
Overall, the report suggests that Medi-Cal will remain one of the dominant fiscal and policy drivers in California’s health system, with continued growth, potential enrollment reductions from federal policy changes, and ongoing debates about financing mechanisms that could affect health plans, providers, and county systems across Orange County.
Legislative Analyst’s Office: CDCR Budget
The LAO’s review of the 2026-27 California Department of Corrections and Rehabilitation (CDCR) budget focuses on declining prison populations, potential prison closures, and major changes to prison mental health oversight. While most of the analysis is statewide, several elements have implications for Orange County and nearby correctional facilities.
Closure of the California Rehabilitation Center (Norco). One of the most relevant developments for Orange County is the planned closure of the California Rehabilitation Center (CRC) in Norco, which is expected by October 2026. The governor’s budget reflects $91 million in savings and the elimination of 522 positions in 2026-27, growing to $138 million annually afterward.
Although the prison is in Riverside County, it serves the broader Southern California region, including Orange County. Its closure may:
- Shift incarcerated populations to other Southern California prisons.
- Affect reentry patterns for individuals returning to counties in the region, including Orange County.
- Reduce the overall number of state prison beds available in Southern California.
Potential for Additional Prison Closures. The LAO concludes that the state could close another prison in the next few years while still maintaining enough capacity to handle population fluctuations. Doing so could save about $150 million annually in operating costs. This broader prison downsizing trend may increase pressure on county jails and local reentry systems as the state reduces incarceration capacity, while continuing the shift toward community-based supervision and services rather than state incarceration.
Americans with Disabilities Act (ADA) Facility Improvements at Nearby Prisons. The governor’s budget proposes $23 million for accessibility improvements at several prisons, including the California Institution for Men in Chino and California Institution for Women in Corona. These facilities are within the greater Southern California region and frequently house individuals from Orange County.
Expansion of Tele-Mental Health in Prisons. The governor proposes expanding tele-mental health services in prisons, shifting providers to remote service delivery and investing up to $12.8 million annually by 2028-29. This effort aims to address persistent mental health staffing shortages in prisons and could influence the availability of treatment services for incarcerated individuals from Orange County, and state recruitment of mental health professionals, potentially including providers located in Southern California.
Federal Receivership Over Prison Mental Health. A major structural change affecting the entire prison system is the appointment of a federal receiver to oversee prison mental health care in 2025 after the state was found to be failing to provide adequate treatment. The administration is proposing $33.9 million annually to begin implementing the receiver’s action plan. Key goals include:
- Recruiting and retaining mental health staff
- Improving suicide prevention systems
- Implementing new quality monitoring tools
For counties, this could influence continuity of care when individuals transition from prison back to the community and coordination between CDCR and county behavioral health systems.
Continued Decline in the State Prison Population. The statewide prison population is projected to decline to about 87,600 people in 2026-27, down from earlier levels. This trend reflects sentencing reforms and policy changes and supports the state’s move toward fewer prisons and greater reliance on local corrections and community supervision. For Orange County, this trend reinforces the ongoing shift toward county-level responsibility for justice-involved populations, particularly in areas such as reentry services, mental health treatment, and supervision.
The governor’s budget proposal signals a continued downsizing of the state prison system, including the closure of CRC in nearby Norco, combined with increased oversight of prison mental health and expanded telehealth services. While the changes are statewide, they will likely shape reentry patterns, mental health coordination, and regional correctional capacity affecting Orange County residents and systems.
Upcoming Hearings
Agendas are typically posted on the committee websites in the Assembly and Senate a few days prior to the hearings. To view hearings after they take place, you may access them in the Assembly or Senate media archives where they are generally available within a few hours of committee adjournment.
Monday, March 09, 2026, 2:30 p.m.
Assembly Budget Subcommittee No. 1 on Health
State Capitol, Room 447
California’s Response to HR 1: Defending Health Care Affordability & Access – Part 2 Federal Impacts on Coverage: Medi-Cal, Covered California, and Immigrant Access to Care
4260 Department of Health Care Services
4800 California Health Benefit Exchange
- Medi-Cal eligibility and caseload impacts under HR 1
- Covered California enrollment, subsidies & health care affordability programs
- Health care access for immigrant communities
Tuesday, March 10, 2026, 1:30 p.m.
Joint Assembly and Senate Health
1021 O Street, Room 1100
Informational Hearing: The Cost of Uncertainty: Health Coverage Access and Affordability Amid Federal Instability
Tuesday, March 10, 2026, 1:30 pm
Senate Joint Hearing Public Safety and Transportation
1021 O Street, Room 1200
Informational Hearing: Examining California's DUI and Traffic Safety Laws
Wednesday, March 11, 2026, 9:00 a.m.
Assembly Budget Subcommittee No. 7 on Accountability and Oversight
State Capitol, Room 126
Impact of Federal Work Rules for Able Bodied Adults Without Dependents on California Behavioral Health and Criminal Justice Programs
Wednesday, March 11, 2026, 9:00 a.m.
Senate Labor, Public Employment, and Retirement
1021 O Street, Room 2200
Informational Hearing: A Year in Review: 2025 Federal Policy Impacts on California's Labor Market
Wednesday, March 11, 2026, 9:30 a.m.
Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation
State Capitol, Room 447
Greenhouse Gas Reduction Fund / California Air Resources Board / Zero-Emission Vehicles
Item No. Description
3360 Energy Resources Conservation and Development Commission
3900 California Air Resources Board
Affordable Housing and Sustainable Communities
7600 Department of Tax and Fee Administration
Sustainable Aviation Fuel Tax Credit
Wednesday, March 11, 2026, 1:30 p.m.
Assembly Budget Subcommittee No. 2 on Human Services
State Capitol, Room 444
Informational Hearing: Foster Care and Child Welfare Services, including review of Overall Trends in Foster Care and Challenges, Tiered Rate Structure Implementation, Review of Immediate Needs Report, Bringing Families Home, and Foster Family Agency Insurance Payments
Thursday, March 12, 2026, 9:30 a.m. or upon adjournment of session
Senate Budget and Fiscal Review Subcommittee No. 3 on Health and Human Services
1021 O Street, Room 1200
H.R. 1 (Public Law No. 119-21) Impacts and State Efforts to Preserve Access to Health Care, Food and Nutrition for All Californians
4260 Department of Health Care Services Medi-Cal Eligibility
5180 Department of Social Services CalFresh & Food Programs CalWORKs
Thursday, March 12, 2026, 9:30 a.m. or upon adjournment of session
Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor, and Transportation
State Capitol, Room 112
Item Description
5225 Department of Corrections and Rehabilitation
5227 Board of State and Community Corrections
Grant Opportunities
Below is a list of the latest grant opportunities released by the state. All opportunities for local jurisdictions may be found here.
Application deadline: 6/8/26 00:00
Title: CAL FIRE Forest Health
State Agency / Department: Department of Forestry and Fire Protection
Match Funding? No
Estimated Total Funding: TBD $ amount of Greenhouse Gas Reduction Fund monies will be awarded to eligible applicants through CAL FIRE’s Forest Health Program.
Funding Method: Advances and Reimbursement(s)
Application deadline: 6/8/26 00:00
Title: CAL FIRE Forest Health
State Agency / Department: Department of Forestry and Fire Protection
Match Funding? No
Estimated Total Funding: Up to $65 million in Proposition 4 (2024) monies will be awarded to eligible applicants through CAL FIRE’s Forest Health Program.
Funding Method: Advances and Reimbursement(s)
Application deadline: 4/6/26 23:59
Title: Endangered Species Conservation and Recovery Grant Program
State Agency / Department: Department of Fish and Wildlife
Match Funding? 25%
Estimated Total Funding: Funds are provided to states and territories from the US Fish and Wildlife Service through their Traditional Conservation Grant Program (Section 6 Grant Program). The Department administers Traditional Section 6 Grant funded projects in coordination with the USFWS through a Section 6 Cooperative Agreement. Authority to administer the program is granted through Section 1501.5 of the Fish and Game Code.
Funding Method: Reimbursement(s)
Application deadline: 5/20/26 00:00
Title: CAL FIRE Business and Workforce Development
State Agency / Department: Department of Forestry and Fire Protection
Match Funding? 100%
Estimated Total Funding: $10,000,000
Funding Method: Advances and Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning February 25.
March 4: Governor Newsom orders flags at half-staff as Reverend Jesse Jackson laid to rest
March 3: Governor Newsom announces appointments 3.3.2026
- Caroline Thomas Jacobs, of El Cerrito, has been appointed Director of the Governor’s Office of Emergency Services
- Megan Kirkeby, of Sacramento, has been appointed Chief Deputy Director at the California Department of Housing and Community Development
- Sean Hammer, of Sacramento, has been appointed Chief Deputy Director at the California Department of Human Resources
- Angela Musallam, of Folsom, has been appointed Deputy Director for Communications at the California Department of Human Resources
- Theresa Biby, of West Sacramento, has been appointed Deputy Director of Program Support at the California Department of Corrections and Rehabilitation
- Melinda McRae, of Cypress, has been appointed Deputy Director of the Office of Communications at the California Department of Public Health
- Ricardo Mendoza, of Whittier, has been appointed Deputy General Manager at California Exposition Park
- Jacob Johnson, of Bakersfield, has been appointed to the Commission on Peace Officer Standards and Training
- Benjamin Therriault, of Martinez, has been reappointed to the California Commission on Peace Officer Standards and Training
- Justin Doering, of Moorpark, has been reappointed to the Commission on Peace Officer Standards and Training
March 3: Governor Newsom proclaims Peace Corps Week
March 3: Governor Newsom, First Partner Siebel Newsom announce new inductees to the California Hall of Fame
March 3: Governor Newsom announces 95% compliance with prohibition of illegal kratom products
March 2: Governor Newsom announces new CARE Court accountability measures to get more chronically mentally ill off our streets, awards $291 million in funding for services and housing
March 2: As Trump tears apart decades of environmental progress, Governor Newsom restores nearly 300,000 acres of habitat and cuts average permitting time to 42 days
February 27: Governor Newsom releases 2025 judicial appointment data
February 27: Governor Newsom announces appointments 2.27.2026
- Christine Ciccotti, of Davis, has been appointed Chief Counsel at the California High Speed Rail Authority
- Amy Tong, of Elk Grove, has been appointed to the Racial Equity Commission
- Ehsan Zaffar, of Long Beach, has been appointed to the Commission on the State of Hate
- Brian Gorrindo, of Leona Valley, has been appointed to the 50th District Agricultural Association, Antelope Valley Fair Board
- Keely Bosler, of Sacramento, has been reappointed to the Central Valley Flood Protection Board where she has served since 2022
- Eric Heins, of Los Angeles, has been reappointed to the California Gambling Control Commission where he has served since 2021
- Michael Gunning, of Elk Grove, has been reappointed to the California State Teachers’ Retirement Board
February 27: First Partner Jennifer Siebel Newsom launches California Love, California Strong to fight loneliness across the state
February 27: California approves $60 million for biodiversity projects and public access to nature
February 25: Governor Newsom honors fallen San Joaquin County Sheriff’s Office Sergeant
February 25: Governor Newsom’s schedule for February 25, 2026
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