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Prepared by Precision Advocacy
As the legislature wraps up budget subcommittee hearings ahead of the anticipated May Revision on May 14, both the administration and legislative leadership continue advancing competing fiscal and policy priorities amid an increasingly complex budget environment. This week, the legislature has moved forward with a budget bill junior, AB 108/SB 108 addressing distressed hospital funding and property tax postponement, and the Assembly is expected to release its own budget framework. At the same time, stronger-than-anticipated April tax collections, reportedly exceeding the governor’s January forecast by approximately $3.3 billion, have modestly improved the state’s near-term fiscal outlook, though policymakers continue to caution that significant structural pressures remain.
Despite improving revenues, the state continues to face substantial ongoing cost pressures tied to Medi-Cal growth, inflationary impacts, housing and homelessness programs, and anticipated federal funding reductions affecting safety-net services. Much of any additional revenue generated through the May Revision is also expected to be constitutionally directed toward Proposition 98 obligations and reserves, limiting discretionary funding available for restoring proposed cuts or expanding programs. As a result, legislative hearings over the past several weeks have increasingly focused on balancing fiscal restraint with growing demands on state and local systems, particularly in areas including health care access, homelessness response, housing implementation, election administration, and consumer protection.
This report provides an overview of several key policy and budget developments relevant to Orange County, including the changing health care landscape surrounding anticipated Medi-Cal coverage losses and the resulting implications for county indigent care systems, provider stability, and uncompensated care pressures. The report also summarizes actions and discussions from the Assembly Budget Subcommittee No. 5 on State Administration hearing held on May 5, which addressed a range of issues affecting local governments, including housing and homelessness implementation, consumer protection oversight, election infrastructure, and state-local coordination efforts.
Collectively, these discussions reflect the broader tension currently shaping the Capitol’s budget deliberations – balancing fiscal sustainability with increasing pressure on county systems that remain central to delivering housing, health care, behavioral health, and public safety services throughout California.
Health Care’s Changing Landscape
After more than a decade of progress expanding coverage and reducing the uninsured rate to historic lows, a series of federal and state policy changes are expected to reverse those gains. As outlined in The New Uninsured report produced by the California Health Care Foundation (CHCF), as many as 1.8 million Californians could lose Medi-Cal coverage in the coming years due to new work requirements, more frequent eligibility redeterminations, and restrictions impacting immigrant populations. The Legislative Analyst’s Office (LAO’s) latest report, How Will the Changing Landscape Affect California’s Health Care System? projects that California’s uninsured population could roughly double by 2030, signaling not just incremental change, but a broader shift in the state’s health care landscape.
County health care infrastructure, including public hospitals, community clinics, and behavioral health systems, is built on the assumption that Medi-Cal provides a stable coverage backbone for low-income residents. As that coverage erodes, Orange County will face a growing population of uninsured individuals with limited alternatives for care. This dynamic is likely to increase demand for safety-net services, drive higher levels of uncompensated care, and place new administrative and fiscal pressures on county systems. While some individuals may reduce their use of care after losing coverage, the care that does occur is more likely to go unpaid, resulting in billions of dollars in additional uncompensated care statewide over time and placing strain on safety-net providers and clinics that rely heavily on Medi-Cal funding.
At the same time, the state faces its own constraints. The governor’s budget proposal projects significant out-year deficits, driven in part by rising Medi-Cal costs and reductions in federal funding. Policymakers are therefore tasked with preserving access to care for those losing coverage while operating within a constrained fiscal environment. The CHCF report outlines potential short-term program options designed to maintain access to care until the state can restore broader Medi-Cal coverage. However, these decisions are unfolding alongside broader system changes, including declining provider reimbursements and shifts in financing structures, which may further limit the capacity of hospitals and clinics to absorb growing demand.
Under state law, counties are required to ensure access to care for residents who lack other coverage. However, county indigent care systems have been significantly scaled back since the implementation of the Affordable Care Act and are not currently structured to absorb a large influx of uninsured individuals. Prior to ACA expansion, county indigent programs served hundreds of thousands of residents statewide. Today, enrollment has dropped dramatically, and funding structures have been partially redirected to other state priorities. As coverage losses accelerate, counties may be required to rapidly scale these programs back up, often without a commensurate increase in dedicated funding.
In practical terms, this means Orange County may face a convergence of pressures – more residents losing coverage, fewer structured programs to absorb them, and increasing reliance on fragmented systems such as emergency care and hospital charity programs. Without a coordinated state response, the county could see increased emergency department utilization, delayed treatment for chronic conditions, and worsening health outcomes, particularly among vulnerable populations including seniors, working families, and immigrant communities. Over time, county indigent care caseloads could grow significantly, potentially reaching hundreds of thousands statewide, with costs rising into the low billions annually depending on how counties structure their programs.
To address these risks, the CHCF report models two primary program options, each reflecting a different approach to balancing cost and access.
The first option represents a more comprehensive approach, with benefits aligned to essential health benefits and no cost sharing for enrollees. It maintains current provider payment rates and includes a three-month bridge for individuals who lose coverage due to administrative or work requirement-related issues. This model is designed to closely resemble the current Medi-Cal structure and would cost the state approximately $4.6 billion annually. This approach would provide the greatest continuity of care, helping to stabilize provider networks and reduce the likelihood that individuals delay care or rely on emergency services.
The second option reflects a more constrained fiscal approach. Modeled after the historic Low-Income Health Program, it introduces limits on certain services, lower provider reimbursement rates, and a $35 copayment for most services. It also shortens the coverage bridge period to two months and reduces overall program costs to approximately $3.1 billion annually. While this option expands access relative to having no program at all, it introduces barriers that may discourage utilization of routine care. This raises concerns about increased strain on emergency departments and safety net providers as individuals defer care until conditions worsen, further amplifying uncompensated care pressures and financial instability across the system.
Across both options, the report assumes a shift away from managed care to a fee-for-service structure, continued use of federal matching funds for emergency services, and an ongoing role for counties in delivering specialty behavioral health services and administering eligibility. These design elements reinforce that counties will remain central to implementation, regardless of the specific model adopted. At the same time, providers, including county-affiliated systems, will be navigating reduced reimbursement growth, higher uncompensated care, and greater financial volatility, all of which could affect service availability and long-term system capacity.
The central tension identified in the report is that lower-cost models reduce state spending but risk undermining access to care, while more comprehensive models better preserve access but require significant investment. Reduced access at the state level does not eliminate demand for care, it shifts that demand to county systems, often in more costly and less effective ways. This cost shift may also impact the broader health care market, as providers attempt to offset losses through higher charges to private insurance or reductions in services.
The report also highlights the importance of statewide uniformity, noting that historical reliance on county-based programs led to wide variation in eligibility, benefits, and access. At the same time, it acknowledges the need for flexibility, allowing counties to tailor services to local needs, underscoring the importance of a state framework that both supports county obligations and provides sufficient resources to meet them. Without this balance, disparities across counties could widen as local decisions increasingly determine access to care.
Additional considerations include administrative capacity, financing strategies, and the role of federal funding. The report notes that eligibility and enrollment will continue to rely on county systems, which may require additional resources as coverage churn increases. It also raises broader questions about how the state will finance these programs over time and whether partnerships with counties or the private sector will be necessary to ensure sustainability. The LAO further emphasizes the need for stronger oversight and data tracking to better understand impacts as they unfold, as well as the potential need for targeted, short-term financial support for counties and providers experiencing acute strain.
As Medi-Cal enrollment declines, the county will face increasing responsibility for ensuring access to care, even as existing indigent care systems remain limited. The choices made by state policymakers in the coming months will therefore have direct implications for the county’s fiscal health, provider network stability, and the well-being of its residents.
A more comprehensive approach to maintaining access to care would help protect Orange County from the most severe impacts of coverage loss, supporting continuity of care and reducing long-term system costs. Conversely, a more limited approach risks shifting costs and responsibilities to the county, potentially straining local systems and leading to poorer health outcomes.
Ultimately, the CHCF report emphasizes the urgency of a coordinated state response that recognizes the critical role of counties while providing the resources necessary to maintain access to care. Ensuring that any state solution aligns with county responsibilities and preserves the integrity of the local safety net will be essential in navigating this transition.
Assembly Budget Subcommittee on State Administration: Housing, Homelessness, & Elections
The Assembly Budget Subcommittee No. 5 on State Administration held its final hearing before the May Revision on May 5, chaired by Assemblymember Sharon Quirk-Silva, with a broad agenda focused on housing, homelessness, consumer protection, elections administration, and arts funding. For Orange County, the hearing was particularly notable given Chair Quirk-Silva’s active engagement on several issues directly affecting local governments, housing implementation, consumer protections, and election administration.
A significant portion of the hearing focused on the Department of Housing and Community Development (HCD), including updates on the HCD Connect system, which supports monitoring and management of housing grant and loan programs. HCD reported that the system remains on schedule and within budget, including implementation work tied to housing elements, annual progress reports, Homekey Plus, and community development programs. Chair Quirk-Silva emphasized the growing complexity of California’s housing and homelessness infrastructure, particularly with ongoing state reorganizations and coordination between HCD, homelessness agencies, and the new Housing Development Finance Committee. HCD also discussed implementation costs associated with recently chaptered housing legislation, including revised implementation estimates for AB 1053, which were significantly reduced through coordination with CalHFA and the Housing Development Finance Committee.
The committee also heard a proposal from the California Interagency Council on Homelessness (Cal ICH) related to implementation of AB 678 concerning LGBTQ+ inclusive and culturally competent homelessness services. Cal ICH emphasized the disproportionate rates of homelessness experienced by LGBTQ+ individuals, particularly transition-age youth, and highlighted the need for improved statewide data collection and culturally competent service delivery. The proposal was approved as budgeted in the governor’s budget proposal. The discussion reflects broader statewide efforts to improve homelessness service coordination and data systems that intersect with Orange County’s regional homelessness response framework and Homeless Housing Assistance and Prevention (HHAP) program implementation efforts.
The hearing also included extensive discussion regarding the Department of Financial Protection and Innovation (DFPI), particularly continuation funding for consumer protection and debt collector licensing programs. Chair Quirk-Silva led a lengthy discussion regarding licensing assessments and fee structures affecting regulated industries, including debt collection and escrow services. Stakeholders raised concerns regarding high licensing and assessment costs, transparency, and the potential impacts on small businesses. DFPI defended the program structure, noting that fees are assessed on a pro rata basis and that the largest assessments primarily impact major national corporations rather than smaller operators. The committee also discussed DFPI’s student loan assistance network, which has reportedly secured over $4.6 million in student debt relief for Californians. These conversations are notable for Orange County given the County’s large consumer base, small business community, and interest in maintaining strong consumer protections while balancing regulatory burdens.
On elections administration, the committee approved multiple Secretary of State budget requests tied to implementation of the Help America Vote Act (HAVA), ongoing support for the VoteCal statewide voter registration database, and continued development of the CAL-ACCESS Replacement System (CARS). The Secretary of State indicated that federal HAVA funds are expected to be depleted by fiscal year 2027-28, raising longer-term funding questions for statewide election infrastructure. The committee also discussed the status of the CARS project, which is intended to modernize campaign finance and lobbying disclosure systems. Legislators questioned project expenditures and implementation timelines, with the Secretary of State maintaining that the system remains on track for functionality by November 2026.
The committee additionally approved funding related to confidential voter registration protections for elected officials and candidates under AB 1392. Chair Quirk-Silva highlighted growing concerns regarding political violence, harassment, and threats directed at elected officials, noting the increasing importance of privacy and security protections for public servants.
Finally, the committee concluded with an informational overview of the California Arts Council during its 50th anniversary year. Members emphasized the economic and community benefits generated by arts investments, including leveraging local government and philanthropic support. The discussion highlighted how state arts investments can drive local economic activity and support community-based organizations throughout California.
Overall, the hearing reflected the Legislature’s continued focus ahead of the May Revision on housing implementation, homelessness coordination, election infrastructure, consumer protection oversight, and sustaining state-local partnerships across a range of programs important to counties and local governments.
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, May 11, 2026, Upon adjournment of Session
Assembly Select Committee on Housing Finance and Affordability
State Capitol, Room 126
Informational Hearing: Innovative Ideas to Address Housing Affordability
Monday, May 11, 2026, 2:30 p.m.
Assembly Budget Subcommittee No. 1 on Health
State Capitol, Room 127
All Departments - Open Issues
Tuesday, May 12, 2026, 1:30 p.m.
Assembly Budget Subcommittee No. 5 on State Administration
State Capitol, Room 447
April Letters / Open Issues
Tuesday, May 12, 2026, 1:30 p.m.
Assembly Joint Hearing Health and Select Committee on Native American Affairs
1021 O Street, Room 1100
Oversight Hearing
Outcomes Review of AB 988 (Bauer-Kahan), Statutes of 2022 - 988 Suicide and Crisis Lifeline
Suicide Prevention and Intervention in California Indian Communities
Wednesday, May 13, 2026, 9:30 a.m.
Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation
State Capitol, Room 447
Transportation
0521 California State Transportation Agency
0964 Transportation Financing Authority
2600 California Transportation Commission
2660 Department of Transportation
2665 High-Speed Rail Authority
2667 High-Speed Rail Authority Office of the Inspector General
2670 Board of Pilot Commissioners for the Bays of San Francisco, San Pablo, and Suisun
2720 Department of California Highway Patrol
2740 Department of Motor Vehicles
Wednesday, May 13, 2026, 1:30 p.m.
Senate Select Committee on Hydrogen Energy
State Capitol, Room 112
Informational Hearing: California's Hydrogen Leadership
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: 7/17/26 23:00
Title: Sea Otter Recovery
State Agency / Department: Coastal Conservancy
Match Funding? No
Estimated Total Funding: This year the Conservancy anticipates approximately $165,000 available for projects that meet the fund’s objectives.
Funding Method: Reimbursement(s)
Application deadline: 6/4/26 17:00
Title: Urban Greening 2026
State Agency / Department: CA Natural Resources Agency
Match Funding? No
Estimated Total Funding: $46,125,000
Funding Method: Advances & Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning April 29.
May 6: Governor Newsom announces $1B in private investment generated through California Competes Tax Credits, driving business expansion in key industry sectors
May 5: Governor Newsom honors fallen California Highway Patrol officers
May 5: Governor Newsom announces new projects helping expand mental health care capacity and treatment statewide
May 5: Governor, First Partner statement on the passing of Doris Fisher
May 4: Governor Newsom proclaims Wildfire Preparedness Week as state doubles down on wildfire readiness
May 4: Governor Newsom warns insurance companies after major state enforcement against State Farm
May 4: Governor Newsom honors California’s fallen peace officer heroes
May 4: May the 4th be with you: California reaches for the stars with space accomplishments that are out of this world
May 1: Governor Newsom statement on Fifth Circuit ruling restricting access to mifepristone
May 1: Governor Newsom announces appointments 5.1.2026
- Daisy Hughes, of Elk Grove, has been appointed Chief Counsel at the Department of Rehabilitation.
- Cindy Elliott, of Los Osos, has been appointed Medical Director of Atascadero State Hospital.
- Thomas David Forderer, of San Jose, has been appointed to the State Independent Living Council.
- Brian Barrett, of El Macero, has been appointed to the California Exposition and State Fair Board of Directors.
May 1: New UC Degree Plus Pilot Program shows demand for career-readiness training
May 1: Governor Newsom visits Pasadena City College construction trades lab helping LA rebuild
May 1: Governor Newsom celebrates launch of western regional energy market, designed to deliver lower energy costs and strengthen electric grid
May 1: Governor Newsom announces 180+ affordable homes in Los Angeles, more planned for San Francisco
April 30: 61 days later, no plan: Trump’s Iran war drives national gas prices to a four-year high, sending prices soaring across the economy
April 29: Governor Newsom announces appointments 4.29.2026
- Christopher “Chris” Given, of Sacramento has been appointed Director of the California Department of Technology.
- Kate Folmar, of Sacramento, has been appointed Deputy Secretary for Communications and External Affairs at the California Environmental Protection Agency.
- Rebecca Beland McNaught, of Sacramento, has been appointed to the Early Childhood Policy Council.
- Elizabeth “Liz” Simons, of Atherton, has been appointed to the Early Childhood Policy Council.
April 29: Governor Newsom announces the completion of first-of-its-kind solar-covered canal in the Central Valley — piloting a new way to save water and reduce costs
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