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Prepared by: Precision Advocacy
Following release of the May Revision, policy committee activity is increasingly giving way to substantive budget negotiations as lawmakers, legislative leadership, and stakeholders work through competing fiscal priorities ahead of final budget decisions in June. While improved revenue projections provided the administration with greater near-term flexibility, significant questions remain regarding the state’s longer-term fiscal outlook, implementation of major federal policy changes, and the sustainability of ongoing spending commitments. At the same time, budget subcommittees are shifting from broad program discussions toward more targeted debates surrounding workload, implementation, and funding tradeoffs across health and human services, public safety, and natural resources programs.
For Orange County, many of these discussions continue to intersect directly with ongoing county priorities. Issues surrounding H.R. 1 implementation, Medi-Cal eligibility operations, indigent care, behavioral health services, childcare access, court capacity, Proposition 36 implementation, and wildfire resilience financing all remain active areas of discussion at the Capitol. The following report summarizes recent budget hearings, policy discussions, and state developments with particular attention to issues that may carry operational, fiscal, and advocacy implications for Orange County moving forward.
Legislative Analyst’s Office Initial Comments on the Governor's May Revision
The Legislative Analyst’s Office (LAO) initial comments on the governor’s May Revision reinforces several themes highly relevant to Orange County’s ongoing concerns regarding Medi-Cal, indigent care, public safety, and long-term fiscal stability. While the May Revision presents a stronger near-term fiscal picture due to improved revenue projections, the LAO cautions that the state’s underlying budget condition remains fragile and structurally imbalanced. Rather than viewing the proposal as evidence of a durable fiscal recovery, the LAO argues that the state continues relying on reserves, borrowing, and temporary budget tools while ongoing operating deficits persist under the administration’s own projections. The LAO specifically warns that California is “ill-prepared for even a slip up in revenues,” noting that even a repeat of the relatively modest 2022 market declines could quickly produce substantial deficits.
These warnings are particularly important because state fiscal stress frequently translates into increased local responsibility. Counties often become the operational backstop when future budget pressures emerge, particularly in health and human services systems where legal obligations continue regardless of fiscal conditions. The LAO notes that while the governor’s proposal includes approximately $1.3 billion in new discretionary General Fund spending and reappropriations, including investments for Los Angeles’ Exposition Park, broadband last-mile infrastructure, and wildfire disaster rebuilding programs, the office questions whether additional spending commitments are prudent given the state’s unresolved structural imbalance. The administration also proposes various non-General Fund investments, including $125 million in bond funding for acquisition of the Golden Gate Fields property in the East Bay, while providing comparatively little detail regarding future changes to the Cap-and-Invest and Greenhouse Gas Reduction Fund structures despite the significance of those programs for future state funding decisions.
The LAO further recommends stronger corrective actions than those contained in the governor’s proposal. Specifically, the LAO suggests redirecting the governor’s proposed $9.7 billion deposit into the newly created Projected Temporary Surplus Holding Account toward the state’s more traditional rainy day reserve and adopting well over $10 billion in budget reductions or net revenue increases to improve long-term fiscal sustainability. In addition, it recommends setting aside $4 billion in reserves to pre-fund Proposition 98 settle-up obligations omitted from the governor’s plan. Together, these recommendations underscore the LAO’s concern that the state should prioritize building stronger fiscal buffers rather than relying on temporary budget mechanisms.
Health and human services implications are particularly notable, as the May Revision expands Medi-Cal savings proposals and fund shifts, including approximately $2.2 billion in Medi-Cal-related solutions affecting provider funding structures and eligibility-related policies. These changes reinforce county concerns regarding H.R. 1 implementation and county eligibility operations. As federal and state fiscal pressures converge, counties could face increased administrative workload associated with eligibility determinations, renewals, and compliance requirements while simultaneously experiencing growing demand on county-supported health systems as residents lose coverage or experience interruptions in care. Increased coverage disruptions could also intensify pressure on county indigent care systems and local safety-net providers.
Behavioral health and related county systems may also face increased pressure. The May Revision includes approximately $200 million in behavioral health-related offsets and fund shifts across departments. While presented as state-level budget solutions, these actions could create downstream impacts for counties responsible for providing behavioral health services and crisis response systems. Reduced state flexibility or constrained funding levels could increase demand for county-supported behavioral health services and further strain local resources.
Public safety implications are more indirect but remain important for Orange County priorities. The LAO repeatedly highlights that structural deficits remain unresolved and warns that annual operating deficits are expected to continue for several years under current projections. Persistent deficits create uncertainty around future state commitments and may place pressure on ongoing investments counties have identified as priorities, including Proposition 36 implementation resources, judgeships, behavioral health treatment investments, and other county-administered public safety initiatives dependent on sustained state support.
The LAO’s assessment ultimately strengthens the argument for preserving local fiscal flexibility and prioritizing stable, ongoing funding commitments rather than relying on one-time solutions. While stronger revenues provide temporary relief, the underlying fiscal outlook remains vulnerable to economic volatility. For Orange County, the report reinforces ongoing advocacy surrounding eligibility operations, indigent care, behavioral health services, and public safety investments.
Assembly Budget Subcommittee on Human Services - Post May Revision Hearing
The Assembly Budget Subcommittee on Human Services hearing this week was particularly relevant because much of the discussion focused on county administrative capacity, implementation of H.R. 1 changes, CalFresh workload, childcare access, and county operational pressures. The hearing also revealed significant tension between the administration and legislators over whether current May Revision proposals sufficiently protect local systems from expected federal impacts.
The most immediate issue for Orange County involves county administrative responsibilities under H.R. 1. The agenda highlighted a proposal providing $30 million one-time for county administration associated with new CalFresh work requirements for Able-Bodied Adults Without Dependents, but this increase is paired with a much larger statewide reduction in county CalFresh administrative funding, producing a net reduction of roughly $89 million compared to the January proposal. The committee agenda questioned whether the state has adequately measured county workload impacts and noted implementation changes begin within weeks.
Childcare generated some of the strongest discussion of the hearing and carries relevance for Orange County families and employers. The May Revision proposes eliminating approximately 6,798 childcare slots statewide through reductions tied to relinquished funding rather than current enrollment cuts. Administration staff specifically identified Orange County among the counties associated with affected agencies and slot discussions. Committee leadership strongly pushed back against reducing childcare capacity, arguing that these slots represent commitments already made and warning that childcare functions as critical economic infrastructure supporting workforce participation and family stability. Chair Corey Jackson (D-Moreno Valley) specifically stated that eliminating these slots would likely face resistance from the legislature.
Childcare capacity remains important not only as a social support issue but also as a workforce issue. The hearing repeatedly emphasized that reductions could disproportionately affect high-cost regions where childcare supply already struggles to meet demand. The administration noted contractors cite issues such as licensing limitations, enrollment patterns, and local market conditions when relinquishing funds, though legislators questioned why available slots were not immediately redistributed to areas with unmet need.
The hearing also reflected broader concern that California may be underestimating local implementation pressures created by federal policy changes. Chair Jackson repeatedly emphasized that H.R. 1 creates additional demands that counties ultimately administer and warned against making state reductions that compound federal instability. Multiple members framed the issue as one of preserving county and local capacity during a period of increasing uncertainty.
From an Orange County advocacy perspective, the hearing strengthens existing county messaging that eligibility operations and safety-net administration are increasingly becoming frontline implementation challenges. The discussion supports continued county arguments that underfunding administrative functions does not reduce need; it shifts costs and operational pressures to local governments.
Assembly Budget Subcommittee on Public Safety - Post May Revision Hearing
The Assembly Budget Subcommittee on Public Safety hearing on May 18 opened with the Legislative Analyst’s Office (LAO) warning that while the governor’s May Revision is technically balanced, the budget continues to rely on one-time solutions and reserves, indicating ongoing structural pressures that may limit future spending flexibility. Members repeatedly emphasized that new spending priorities will increasingly require tradeoffs elsewhere in the budget.
The hearing highlighted ongoing statewide concerns around court access, judicial staffing, and system capacity. While much of the direct conversation focused on the Inland Empire’s longstanding judgeship shortages, members repeatedly raised broader concerns regarding judicial vacancies, retention challenges, and unequal court resources statewide. The May Revision includes investments in court interpreter services and language access, however, lawmakers expressed concern that broader judicial capacity issues remain unresolved and could continue affecting case processing and access to justice.
The hearing also demonstrated continued state attention on public safety priorities, including human trafficking and organized retail theft. The administration proposed $10 million one-time for a Human Trafficking Vertical Prosecution Grant Program intended to support specialized prosecution models. During discussion, the administration cited California’s significant share of reported human trafficking cases and emphasized the need for additional resources to investigate and prosecute these crimes. For Orange County, which has historically devoted significant law enforcement and victim-services resources to combating human trafficking, this proposal could create future opportunities for additional local resources and grant funding.
The hearing further reinforced that organized retail theft remains a significant state priority. The Department of Justice requested additional funding to complete existing organized retail criminal enterprise investigations and lawmakers continued discussions around prosecution tools and enforcement capacity. While relatively modest in direct funding terms, the discussion signals ongoing state interest in strengthening responses to retail theft.
Another significant discussion involved correctional spending and long-term system planning. The hearing agenda reflects that prison populations continue to decline and that the anticipated impacts from Proposition 36 are now projected to be lower than originally estimated. At the same time, members questioned why correctional spending continues increasing despite those population trends. The LAO again suggested that prison deactivation could generate substantial ongoing savings, while members pressed the administration for additional detail regarding projected efficiencies and spending reductions.
For Orange County, these discussions may become increasingly relevant as debates continue around where future state investments should be directed. Counties continue seeking additional resources for implementation of Proposition 36, behavioral health services, courts, probation functions, and public safety infrastructure. As pressure increases to identify savings in state correctional spending, counties will need to continue advocating that a portion of those resources be redirected toward local systems responsible for carrying out many of these functions on the ground.
Overall, the discussion reinforced that many public safety priorities remain active heading into final budget negotiations. Issues surrounding court capacity, Proposition 36 implementation resources, human trafficking investments, retail theft enforcement, and broader county public safety funding discussions will remain areas worth monitoring closely as budget deliberations continue.
Senate Joint Informational Hearing on Wildfire Mitigation and Management
The Senate Emergency Management Committee and Natural Resources and Water Committee held a joint informational hearing last week titled Wildfire Mitigation, Resilience Financing, and Recovery. Chaired by Senators Josh Becker (D-Menlo Park) and Henry Stern (D-Sherman Oaks), the hearing was attended by Senators Kelly Seyarto (R-Murrieta), Sasha Renee Perez (D-Pasadena), Susan Rubio (D-West Covina), Christopher Cabaldon (D-West Sacramento), and Timothy Grayson (D-Walnut Creek). The hearing follows the release of the SB 254 resiliency study, which was directed by the legislature to provide a candid assessment of California’s current catastrophe resilience and identify policy pathways and options for addressing wildfire mitigation, insurance market challenges, financing structures, and disaster recovery needs. The report emphasizes that California’s wildfire challenges are no longer isolated environmental concerns but interconnected issues affecting insurance affordability, utility systems, local government preparedness, and long-term fiscal sustainability.
The hearing itself reflected many of the core themes raised in the SB 254 report – the need for more sustained funding, stronger community-level mitigation strategies, improved data systems, and a shift toward a more coordinated statewide approach. Committee members repeatedly emphasized concerns that despite billions of dollars in wildfire investments over recent years, comparatively little funding has gone directly toward community and home hardening. Experts and lawmakers noted that while landscape-level investments remain important, mitigation strategies ultimately must better protect communities and reduce risks where people actually live. The hearing also highlighted concerns about the absence of stable ongoing funding and the need to prioritize investments that demonstrate measurable risk reduction.
Wildfire Mitigation Update. Daniel Berlant, State Fire Marshal; Robyn Fennig, Office of Emergency Services; Patrick Wright, Wildfire and Forest Resilience Task Force; and Brian Metzker from the Legislative Analyst’s Office (LAO) spoke on this item.
Berlant and Fennig both emphasized the sheer scale of California’s wildfire challenge while also highlighting the substantial amount of work already underway. Fennig testified that federal funding delays continue to create significant implementation obstacles. FEMA hazard mitigation grants had reportedly been taking up to 380 days for approval and FEMA had also stopped extending grant performance periods. In addition, no new Hazard Mitigation Assistance grants had been approved since mid-2025 because of federal approval requirements that slowed processing. Fennig characterized faster federal grant deployment as one of the most important areas requiring improvement.
Wright highlighted progress by the Wildfire and Forest Resilience Task Force, noting approximately 700,000 acres of treatment activity annually supported by roughly $6 billion in combined state and federal investments. However, he stressed that while predictive capabilities at the broader landscape level have improved significantly, the state still lacks sufficient parcel-level information needed to target mitigation activities effectively. This concern aligned closely with recommendations contained in the SB 254 report, which calls for stronger statewide data and analytical infrastructure to better identify and prioritize mitigation needs.
Senator Stern expressed concern that large portions of Proposition 4 climate bond investments do not sufficiently prioritize home and community protection. Berlant similarly stressed that fuel modification efforts remain among the most effective tools for reducing risk but noted that community-level hardening generally provides greater benefit than isolated parcel improvements.
Senator Seyarto raised concerns regarding the role of CEQA in delaying fire prevention projects. The governor’s emergency order temporarily streamlining CEQA requirements for wildfire mitigation efforts has expired, although witnesses and members noted it had accelerated project implementation. Both Stern and Seyarto expressed support for pursuing longer-term streamlining options for wildfire mitigation projects.
Metzker provided an overview of the state’s evolving wildfire resilience funding structure and highlighted concerns regarding long-term sustainability. State funding increased from approximately $200 million in 2018-19 to roughly $1.1 billion in 2021-22 before declining to approximately $620 million in 2025-26. Funding sources also shifted considerably, moving from Greenhouse Gas Reduction Fund (GGRF) support to substantial General Fund investments and more recently toward Proposition 4 climate bond resources. The LAO noted that while recent General Fund surpluses supported substantial one-time investments, those funding levels are unlikely to continue in a more constrained fiscal environment.
The discussion also highlighted concerns about future funding stability. Historically, wildfire resilience efforts benefited from a dedicated $200 million annual GGRF allocation, but under the new cap-and-invest framework beginning in 2026-27, annual allocations become variable. Current administration projections estimate approximately $142 million for wildfire resilience activities, though proposed amendments to cap-and-invest regulations could substantially reduce available revenues and potentially eliminate dedicated statutory wildfire allocations altogether.
Financing Wildfire Resilience and Recovery at Scale. Joy Chen of Every Fire Survivor’s Network, Mark Brown of the Marin Wildfire Prevention Authority, and Michael Wara of Stanford’s Woods Institute for the Environment discussed financing approaches and long-term resilience strategies.
Chen described her experience organizing communities following the Eaton and Palisades fires and advocated for stronger support systems for disaster survivors, more coordinated state leadership, and guaranteed insurance availability for hardened homes.
Brown discussed the Marin Wildfire Prevention Authority’s regional model, funded through a local fee structure that supports coordinated planning, inspections, grant programs, and mitigation activities across jurisdictions. He highlighted the success of the Authority’s “Ember Ready” program and emphasized the importance of collecting parcel-level data to improve risk modeling and insurance market responsiveness.
Wara focused on the question underlying much of the hearing: where sustainable funding will come from over the long term. He advocated for durable funding mechanisms that better align wildfire risk with financing sources, potentially including insurance or utility-related fees. He also stressed the need to empower local governments and strengthen community-level mitigation requirements, particularly around emerging “Zone Zero” standards.
Throughout the hearing, members repeatedly returned to a common theme reflected throughout the SB 254 study itself – California has invested heavily in wildfire resilience, but current funding structures remain fragmented and heavily reliant on one-time resources. The broader challenge moving forward appears less about whether additional mitigation is needed and more about how the state creates a durable, data-driven, and community-centered framework capable of sustaining those efforts over the long term.
We will continue to monitor and report on these policy discussions as they evolve.
Hearing Materials
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, June 01, 2026, Upon Adjournment of Assembly and Senate Floor Sessions
Assembly Joint Legislative Audit
State Capitol, Room 447
- Presentation by the State Auditor
Status Report
Work in Progress
- Audit Requests for Consideration (Heard in Sign-In Order)
- 2026–107 Department of Human Resources – Dental Benefits Procurement (Senator Cortese)
- 2026–109 University of California – Library Resources (Assembly Member Muratsuchi)
- 2026–111 Law Enforcement Agencies – Information Sharing (Senator Archuleta)
- 2026–117 Employment Development Department – Unemployment Insurance Claims (Assembly Member Addis)
- 2026–119 Housing and Community Development – Housing Development Monitoring (Assembly Member Avila Farias)
- 2026–127 Local Law Enforcement – Human Trafficking (Assembly Member Michelle Rodriguez)
Note: Audit requests must have been received by February 12, 2026, to be considered at this hearing.
Thursday, June 04, 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
May Revision
All Departments - Open Issues
Thursday, June 04, 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
May Revision
All Departments - Open Issues
Thursday, June 04, 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
May Revision
All Departments - Open Issues
Thursday, June 04, 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
May Revision
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.
Anticipated Open Date: May 13, 2026
Title: Regional Wildfire & Landscape Resilience Grants
State Agency / Department: Department of Forestry and Fire Protection
Match Funding? No
Estimated Total Funding: $30,000,000
Funding Method: Advances & Reimbursement(s)
Anticipated Open Date: September, 2026
Title: Dam Safety and Climate Resilience Local Assistance
State Agency / Department: Department of Water Resources
Match Funding? 50%
Estimated Total Funding:$228,200,000
Funding Method: Advances & Reimbursement(s)
Application Deadline: 6/24/26 17:00
Title: 21st Century California School Leadership Academy, Cohort 3
State Agency / Department: CA Department of Education
Match Funding? No
Estimated Total Funding: $12,828,000
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning May 13.
May 20: During Infrastructure Week, Governor Newsom announces $540 million investment to improve infrastructure statewide, connecting Californians to reliable and safe transportation
May 20: California secures federal assistance to support response to Bain Fire in Riverside County
May 19: Governor Newsom advocates for disaster recovery and stronger crisis response in Washington, D.C.
May 19: Trump sticks Taxpayers with $111 million bill for his illegal deployment of the National Guard in Los Angeles last year
May 19: Governor Newsom announces common signs of “California Derangement Syndrome” — and highlights easy cures
May 18: California secures federal assistance to support response to Sandy Fire in Ventura County
May 18: Governor, First Partner statement on Islamic Center of San Diego shooting
May 15: NIMBYs be warned: Court orders Huntington Beach to pay up for repeated violations of housing law
May 15: Governor Newsom celebrates more than 380 new affordable homes coming to the Bay Area and Coachella Valley
May 15: Governor, First Partner statement on the passing of Rita Semel
May 14: Governor Newsom announces appointments 5.14.2026
- Jonathan Klein, of Lafayette, has been appointed Executive Director of the Housing Development and Finance Committee
- John Ohanian, of Vacaville has been appointed Statewide Chief Data Officer at the Office of Data and Innovation
- Subbarao Mupparaju, of Sacramento has been appointed the Director of the Financial Information System for California (FI$Cal)
- David Zisser, of Sacramento, has been appointed Deputy Director of Housing Policy Development at the California Department of Housing and Community Development
- Julissa De Gonzalez, of Sacramento, has been appointed Chief Deputy Director at the Office of Tax Appeals
- Yogesh “Yogi” Chugh, of Fremont, has been appointed to the Structural Pest Control Board
May 14: California hosts the President of Catalonia for 40th anniversary of bilateral engagement
May 14: Governor Newsom announces revised budget that eliminates California’s deficit, maintains investments for working families, healthcare, education, and businesses
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