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Prepared by Precision Advocacy
Two significant signals emerged last week that are beginning to frame the 2026-27 state budget – the governor’s early posture ahead of the May Revision and the Senate Democrats’ newly released budget framework. Taken together, they reinforce that, even with stronger-than-expected revenues, the state remains in a constrained fiscal environment where ongoing deficits, not one-time gains, are driving decision-making.
On the administration side, Governor Gavin Newsom made clear in remarks to Assembly Democrats that his May Revision will include additional spending cuts, despite revenues trending above January projections. His comments reflect a continued focus on addressing the state’s structural imbalance, estimated by the Legislative Analyst’s Office to reach roughly $30 billion annually in the coming years, and ensuring the budget is balanced on a multi-year basis. The governor also signaled he may revive previously rejected proposals aimed at reducing out-year deficits, underscoring a willingness to push difficult fiscal choices in his final budget year. While April tax receipts are coming in strong, driven in part by higher corporate and personal income tax collections, much of any upside is already committed. Constitutional formulas will direct a large share of new revenues to Proposition 98 education funding and reserve deposits, significantly limiting discretionary spending flexibility.
At the same time, Senate Democrats released their budget plan, which takes a somewhat different approach. The Senate framework emphasizes building reserves while rejecting some of the governor’s proposed cuts and increasing investments in priority areas such as education, housing, and safety-net programs. It also signals openness to identifying new revenues, potentially through special fund mechanisms or targeted assessments on large businesses, paired with additional, yet-to-be-defined spending reductions to address the deficit over time. This reflects an ongoing tension between maintaining core programs and confronting the state’s long-term fiscal gap.
These developments are unfolding alongside broader fiscal pressures, including uncertainty tied to federal actions under H.R. 1 and proposals among some lawmakers to raise new revenues through taxes on corporations or high-income individuals. However, as budget experts continue to caution, new revenue alone is unlikely to resolve the state’s structural imbalance and could, in some cases, compound if used primarily to backfill programmatic expansions rather than reduce baseline spending.
In short, the key takeaway for counties is that stronger revenues have not fundamentally changed the budget picture. The May Revision is still expected to include difficult tradeoffs, and negotiations between the administration and legislature will likely center on how to balance ongoing deficits while preserving core programs, particularly those that serve as critical safety nets at the local level.
Senate Releases Proposed Budget Outline
The Senate’s “Foundation for the Future” budget plan represents a deliberate effort to stabilize California’s fiscal outlook while protecting core safety net programs at a moment when Orange County is actively warning of a convergence of fiscal, operational, and service delivery pressures. The Senate plan can be understood as a framework that aligns with the County’s concerns in direction and policy intent, but not yet in the scale or immediacy of funding the County is seeking.
At a high level, the Senate plan is built around three pillars, responsible budgeting, maintaining vital programs, and improving long-term fiscal health, and is anchored by a short-term revenue surge of roughly $20 billion. Those funds are used primarily to build reserves, reaching nearly $39 billion in 2026-27, and to avoid deeper program cuts that would otherwise exacerbate pressure on local governments. The plan also acknowledges a structural deficit exceeding $20 billion and proposes an approach of spending reductions and new revenues, most notably a “Fair Share Contribution” from large employers to offset Medi-Cal costs and support the broader health system, including counties.
Within this framework, the Senate plan makes a series of targeted investments and policy choices that are highly relevant to counties. In the Resources, Environmental Protection, and Energy area, the plan provides $1 billion in Greenhouse Gas Reduction Fund (GGRF) allocations for legislative priorities and $2.5 billion in Proposition 4 climate bond investments, ensuring continued funding for climate resilience, wildfire prevention, and environmental protection. These investments support broader local infrastructure and resilience priorities, including those highlighted in state and regional planning discussions.
The most significant alignment with Orange County’s budget concerns is found in health and human services, where the Senate takes a clear posture of maintaining the safety net. The plan maintains In-Home Supportive Services (IHSS) at current levels, rejecting proposals to shift additional costs to counties, and provides $50 million for legal aid and $100 million for CalFood to support food banks. It also maintains full-scope Medi-Cal for certain populations, delays reductions to clinics and dental services, and postpones the implementation of Medi-Cal premiums, decisions that collectively prevent immediate coverage loss and system disruption.
Critically, the plan also includes special fund support for local healthcare needs, explicitly recognizing increased county workload due to H.R. 1 and directing resources to support county administration and struggling hospitals. This is a key point of alignment with Orange County’s budget letter and Board-adopted priorities, which emphasize that stricter eligibility rules, more frequent redeterminations, and new administrative requirements will significantly increase county workload and costs.
However, while the Senate clearly acknowledges these pressures, it does not yet commit to the scale of funding the County is requesting. Orange County is seeking hundreds of millions of dollars in General Fund support for eligibility workforce and CalFresh administration, reflecting immediate and significant operational needs. The Senate’s approach, tying future support to a new revenue mechanism and deferring details to the budget process, creates a gap between recognition and near-term resourcing.
This gap is even more pronounced in the area of indigent care, which Orange County identifies as a critical risk. The County’s priorities call for at least $700 million in 2026-27 and $2.3 billion in 2027-28 to rebuild indigent care systems in anticipation of coverage losses. The Senate plan does not directly provide a funding stream at that level. Instead, it attempts to mitigate the issue upstream by preserving Medi-Cal coverage and stabilizing the healthcare system. While this reduces the number of individuals who may fall into indigent care, it does not eliminate the County’s need to rebuild or expand those services.
A similar dynamic is evident in behavioral health, where Orange County has requested substantial new funding to address increased demand and reduced federal participation. The Senate plan does not include a targeted behavioral health augmentation at that scale, instead relying on broader system stabilization and Medi-Cal investments to provide indirect support.
In contrast, there are several areas of strong alignment. The Senate provides $500 million for the Homeless Housing, Assistance, and Prevention (HHAP) program Round 7 and $1 billion for Round 8 , directly matching Orange County’s priority to continue and expand homelessness funding. It also includes $1 billion for homeownership programs and $1 billion for affordable housing, aligning with the County’s support for housing investments and its broader efforts to address homelessness and affordability.
The Senate plan funds access to justice investments, including $250 million for courthouse maintenance, $3 billion in lease revenue bonds for courthouse construction, and funding for new judgeships. It also continues $100 million for Proposition 36 implementation and $100 million for the Victims of Crime Act (VOCA). These investments partially align with Orange County’s requests. The County has specifically called for $400 million for Proposition 36 implementation and $110 million for diversion and behavioral health services, citing significant increases in caseloads and system demand. While the Senate maintains funding, it does not meet the scale of the County’s request.
Additional County priorities, such as $30 million in ongoing funding for County Veterans Service Offices, are not directly addressed in the Senate plan.
The Senate’s plan should be viewed as a stabilizing and protective framework that aligns with Orange County’s concerns at a conceptual level. It recognizes the pressures created by H.R. 1, prioritizes maintaining coverage and core services, avoids shifting additional costs to counties in key areas like IHSS, and begins to identify funding mechanisms to support local governments, particularly in managing increased administrative workload.
At the same time, the plan falls short of Orange County’s priorities in several critical respects. It does not yet provide the level of direct, flexible, and immediate General Fund support that the County is seeking for eligibility operations, indigent care, and behavioral health. It also does not fully meet the scale of funding requested for Proposition 36 implementation or address emerging needs such as veterans services. In many cases, the Senate’s approach is to mitigate impacts indirectly, through program preservation and system stabilization, rather than providing direct fiscal backfill to counties.
In practical terms, this positions the Senate plan as a strong starting point for negotiations rather than a final solution. The alignment on problem definition and overall direction gives Orange County a solid foundation for continued advocacy. The remaining challenge, and the focus of the budget process moving forward, will be translating that alignment into concrete funding commitments that match the scale, urgency, and operational realities outlined in the County’s budget priorities.
March Revenues
The Department of Finance (DOF) and State Controller have released reports on March’s revenues as compared to the 2026-27 governor’s budget proposal.
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Tax Revenues
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DOF March
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DOF Fiscal YTD
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Controller Fiscal YTD
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Personal Income
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$519 million above projections
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$4.832 billion above projections
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$4.102 billion above projections
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Corporation
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$927 million above projections
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$2.754 billion above projections
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$2.620 billion above projections
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Sales and Use
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$83 million above projections
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$85 million above projections
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$185.018 million below projections
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Total Revenues
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$1.537 billion above projections
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$8.564 billion above projections
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$7.608 billion above projections
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State Auditor’s Report on Victim Restitution
The State Auditor’s report on victim restitution was requested by Senator Angelique Ashby (D-Sacramento) and commissioned by the Joint Legislative Audit Committee in response to growing concerns that, despite a constitutional guarantee, California’s restitution system is not effectively delivering payments to crime victims. The legislature specifically sought to understand persistent issues around equity, transparency, and outcomes, as repayment rates remain low and inconsistent across jurisdictions. The audit included the California Department of Corrections and Rehabilitation (CDCR), the Franchise Tax Board (FTB), the California Victim Compensation Board (CalVCB), and the local collection entities of Kern, San Diego, and Contra Costa counties regarding their administration of victim restitution programs.
The audit ultimately finds that the system is fragmented, inconsistent, and largely ineffective. While courts routinely order restitution, only a small share of that money ever reaches victims, often just a few percentage points of what is owed over time. Victims frequently receive partial payments over many years or nothing at all, despite orders requiring full reimbursement.
This gap is driven by several interconnected challenges. Responsibility for restitution is spread across courts, counties, and multiple state agencies, resulting in a decentralized system with uneven practices and limited coordination. In some cases, the state has been unable to distribute most of the restitution it has already collected simply because it lacks sufficient information to locate victims. At the same time, key policies, such as how interest is applied or when debts are referred for collection, are interpreted differently across counties, leading to inconsistent and sometimes inequitable outcomes.
Operational limitations further compound these issues. Many local collection entities rely on outdated systems that cannot adequately track what is owed, collected, or outstanding, making it difficult to measure performance or improve processes. And even where systems function well, a fundamental constraint remains – many individuals ordered to pay restitution lack the financial means to do so, resulting in large, long-term debts with limited likelihood of full recovery.
Although Orange County was not directly audited, these findings are broadly applicable given the central role counties play in administering restitution. The report points to systemic issues, including low collection rates, poor interagency coordination, inconsistent practices, and outdated infrastructure. that is likely to affect local operations.
In response, the Auditor recommends reforms focused on improving coordination, standardizing practices, and modernizing systems. These include better data sharing (particularly victim contact information), clearer statutory guidance on interest and collections, consistent referral of delinquent debt, and investment in modern case management systems.
The report underscores a fundamental disconnect between policy intent and real-world outcomes. While California’s restitution framework is designed to make victims whole, the current system falls short. Without stronger coordination, clearer rules, and improved infrastructure, the gap between what courts order and what victims actually receive is likely to persist.
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, April 27, 2026, 2:30 p.m.
Assembly Budget Subcommittee No. 1 on Health
State Capitol, Room 127
California's Response to Federal Retrenchment in Public Health
4265 Department of Public Health
Overview of budget, estimate changes, budget change proposals, and trailer bills
Oversight of network and partnership initiatives
Monday, April 27, 2026, 2:30 p.m.
Assembly Budget Subcommittee No. 6 on Public Safety
State Capitol, Room 447
All Departments
Monday, April 27, 2026, 3:00 p.m.
Senate Transportation
1021 O Street, Room 2100
Informational Hearing: Review of the California High-Speed Rail Authority Draft 2026 Business Plan
Tuesday, April 28, 2026, 1:30 p.m.
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 447
0511 Secretary for Government Operations Agency
7760 Department of General Services
7502 Department of Technology
0680 Governor's Office of Service and Community Engagement
1703 Privacy Protection Agency
9210 Local Government Financing
0840 State Controller
0160 Legislative Counsel Bureau
Wednesday, April 29, 2026, 9:30 a.m.
Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation
State Capitol, Room 447
Energy
0509 Governor's Office of Business and Economic Development
3355 Office of Energy Infrastructure Safety
3360 Energy Resources Conservation and Development Commission
8660 California Public Utilities Commission
Wednesday, April 29, 2026, 1:30 p.m.
Assembly Budget Subcommittee No. 2 on Human Services
State Capitol, Room 444
0530 California Health and Human Services Agency
4700 Department of Community Services and Development
5180 Department of Social Services
Automation Projects, including the California Statewide Automated Welfare System (CalSAWS)
Proposal for Continued Funding for the Stop the Hate Program Administered by the Department of Social Services
All Related January Governor's Budget Proposals for California Health and Human Services Agency and Department of Community Services and Development
Expected Impacts of Federal H.R. 1 on People Served in These Programs and Proposals to Reduce Harm in California
Spring Finance Letters for All Departments
Thursday, April 30, 2026, 9:30 a.m. Or upon adjournment of Session
Senate Budget and Fiscal Review Subcommittee No. 1 on Education
1021 O Street, Room 2100
6100 Department of Education
Universal School Meals Update
Kitchen Infrastructure and Training Grants
Expanded Learning Opportunities Program
Learning Recovery Block Grant
Student Support and Discretionary Block Grant
Community Schools
Thursday, April 30, 2026, 9:30 a.m. Or upon adjournment of Session
Senate Budget and Fiscal Review Subcommittee No. 2 on Resources, Environmental Protection, and Energy
1021 O Street, Room 2200
All Departments - Open Issues
Thursday, April 30, 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
4260 Department of Health Care Services
Behavioral Health Services
4440 Department of State Hospitals
4560 Behavioral Health Services Oversight and Accountability Commission
All Departments - Open Issues
Thursday, April 30, 2026, 9:30 a.m. Or upon adjournment of Session
Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government
State Capitol, Room 113
0515 Business and Consumer Services Agency
0516 Housing and Homelessness Agency
0810 Debt Bond Allocation Committee
0968 Tax Credit Allocation Committee
1700 Civil Rights Department
2240 Department of Housing and Community Development
2245 California Housing Finance Agency
2250 Housing Development and Finance Committee
Thursday, April 30, 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
All Departments - Open Issues
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: 4/27/26 17:00
Title: Fertilizer Research and Education Program (FREP) Call for Proposals
State Agency / Department: CA Department of Food and Agriculture
Match Funding? No
Estimated Total Funding: $700,000
Funding Method: Reimbursement(s)
Application deadline: 6/19/26 23:59
Title: Tobacco Grant Program FY 2026/27
State Agency / Department: CA Arts Council
Match Funding? No
Estimated Total Funding: $28,500,000
Funding Method: The Tobacco Grant Program is a reimbursement grant. DOJ will reimburse selected public agencies for approved expenditures upon receipt of invoices, quarterly progress reports, and other enforcement data required.
Application deadline: 5/20/26 12:00
Title: 2026-2027 Zip Books
State Agency / Department: CA State Library
Match Funding? No
Estimated Total Funding: $800,000
Funding Method: Advances & Reimbursement(s)
Application deadline: 6/3/26 12:00
Title: 2026-2027 LSTA Digital Literacy and Access
State Agency / Department: CA State Library
Match Funding? No
Estimated Total Funding: $250,000
Funding Method: Advance(s)
Application deadline:5/12/26 16:00
Title: Clean Off-Road Equipment Voucher Incentive Project (CORE) Administrator
State Agency / Department: Air Resources Board
Match Funding? No
Estimated Total Funding:Initial funding amount has not been finalized and additional funding may come in future fiscal years.
Funding Method: Advances & Reimbursement(s)
Application deadline: 5/12/26 16:00
Title: Clean Truck and Bus Voucher Incentive Project (HVIP) Administrator
State Agency / Department: Air Resources Board
Match Funding? No
Estimated Total Funding: Specific funding amounts have yet to be determined.
Funding Method: Advances & Reimbursement(s)
Application deadline: 5/12/26 16:00
Title:California Services to Science Academy (CSSA) Cohort 2.0: Technical Support and Assistance for Promising and Innovative Prevention Programs
State Agency / Department: Department of Health Care Services
Match Funding? No
Estimated Total Funding: $820,000
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning April 15.
April 22: Governor Newsom announces appointments 4.22.26
- Nicole Elliott, of San Francisco, has been appointed to the California Water Commission.
- Marie Ussery, of Orland, has been appointed to the Veterinary Medical Board
- Farshid Towfighi Namin, of Tarzana, has been appointed to the California Acupuncture Board
- Stacy Bragg, of Sacramento, has been reappointed to the Board of Optometry, where she has been serving since 2023
- Robert Klepa, of Los Angeles, has been reappointed to the California State Board of Optometry
- Joseph Pruitt, of Menifee, has been reappointed to the State Board of Optometry
April 22: En celebración del Día de la Tierra, el Gobernador Newsom y la Primera Pareja Siebel Newsom anuncian un plan para crear tres nuevos parques estatales
April 22: In celebration of Earth Day, Governor Newsom and First Partner Siebel Newsom announce plan to create three new state parks
April 22: Governor Newsom and First Partner Siebel Newsom celebrate 50th anniversary of the California Arts Council
April 22: What Fox News won’t report: California’s fast food minimum wage increase helped 730K workers with ZERO job loss
April 21: Governor Newsom announces appointments 4.21.2026
- Marie Daly, of Sacramento, has been appointed Chief, Legislative Affairs, Operations at the California Department of Corrections and Rehabilitation
- Eric Mejia, of Jurupa Valley, has been appointed Warden of the California Institution for Men
- Robert Rodriguez, of Elk Grove, has been appointed Assistant Director of Public Safety Communications at the California Governor’s Office of Emergency Services
- Kisha Collier, of Victorville, has been appointed to the 28th District Agricultural Association – San Bernardino County Fair
- Michelle Radtke, of Alturas, has been appointed to the 34th District Agricultural Association – Modoc County Fair
- Beau Lynott, of San Diego, has been reappointed to the Private Investigator Disciplinary Review Committee
- Maggie Soleimani, of Los Angeles, has been reappointed to the Private Investigator Disciplinary Review Committee
- Joe Yum, of Contra Costa County, has been reappointed to the Private Investigator Disciplinary Review Committee
April 21: Governor Newsom proclaims John Muir Day 2026
April 21: California has replaced asphalt with trees, shade, and protection from extreme heat at 215 schools statewide
April 21: Governor Newsom celebrates California as #1 farm state on California Agriculture Day, urges Trump to end Iran war punishing farmers
April 21: 56 ways California has honored Earth Day as Trump wages war on the planet
April 21: Governor Newsom proclaims Autism Acceptance Month
April 21: El Gobernador Newsom reconoce a las víctimas de delitos durante la Semana Nacional de los Derechos para las Víctimas del Crimen
April 21: Governor Newsom honors crime victims during National Crime Victims’ Rights Week
April 20: Governor Newsom proclaims California Library Week
April 20: During Earth Week, Governor Newsom announces California surpasses $1 billion in clean truck and bus incentives, as Trump surrenders clean transportation future to China
April 20: Governor Newsom proclaims California Arts Council 50th Anniversary
April 20: California marks 10 years since voter-approved cannabis legalization
April 17: Governor Newsom declares states of emergency related to multiple severe weather events
April 17: Governor Newsom announces appointments 4.17.26
- Russell Fong, of Sacramento, has been appointed Undersecretary of the Government Operations Agency
- Alicia de la Garza, of Sacramento, has been appointed Deputy Director of Public Affairs at the California Department of Fish and Wildlife
- Meagan Tokunaga Block, of Sacramento, has been appointed Director of Program Development and Strategic Initiatives at the California Housing Finance Agency
- Cacilie “Cess” Williams, of Fair Oaks, has been appointed Special Assistant to the Secretary at the California Environmental Protection Agency
- Brian Conley, of Laguna Woods, has been reappointed to the Mount San Jacinto Winter Park Authority
- Sandra Magaňa Cuellar, of Corona, has been reappointed to the Mount San Jacinto Winter Park Authority
- Jeff Ohlfs, of Twentynine Palms, has been reappointed to the Mount San Jacinto Winter Park Authority
April 17: Governor Newsom exposes Trump’s Sable offshore pipeline lie: one month of oil, prices have only gone up
April 17: Governor Newsom demands answers from RFK Jr. over dangerous and racist remarks about “reparenting” Black children
April 17: Here’s six new ways California is modernizing state government
April 17: Ahead of Earth Day, Governor Newsom calls on Californians to take action on climate
April 17: Governor Newsom proclaims Arab American Heritage Month
April 16: Governor Newsom announces updated judicial appointments
April 15: Governor Newsom delivers $520 million in utility bill relief to millions of Californians with more coming this summer
April 15: Tax Day Reminder: California pays Trump’s bills
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