October 16, 2025

The 2025-26 Budget

Overview of the Spending Plan

Appendix 2: General Fund Spending Solutions in the 2025‑26 Spending Plan

Appendix 2, Figure 1

General Fund Revenue and Borrowing Solutions in the 2025‑26 Spending Plan

Excludes Proposition 98 (In Millions)

Solution Type

Description

2024‑25

2025‑26

Borrowing

Medi‑Cal maneuver

$2,150

$1,291

Borrowing

Additional Medi‑Cal maneuver

—

1,000

Borrowing

Middle Class Scholarships arrears budgeting

—

918

Borrowing

CSU payment deferral (May/June to July 2026)

—

144

Borrowing

UC payment deferral (May/June to July 2026)

—

130

Borrowing

HOPE for Children Trust Account Fund transfer

—

40

Borrowing

Unallocated special fund loans (Control Section 13.40)

—

1,500

Borrowing

Special fund loans

—

550

Borrowing

Proposition 98 payment delay

1,917

—

Revenue Related

Single Sales Factor for Financial Institutions

—

330

Totals

$4,067

$5,903

HOPE = California Hope, Opportunity, Perseverance, and Empowerment.

Appendix 2, Figure 2

General Fund Spending Solutions in the 2025‑26 Spending Plan: All Other

Excludes Proposition 98 (In Millions)

Department or Program

Description

2023‑24

2024‑25

2025‑26

CDCR

Unallocated operational improvements

—

—

$125

CDCR

Position reductions related to the transfer of condemned people

—

—

9

CDCR

CalAIM Justice‑Involved Initiative program support

—

—

6

CSM

Suspension of four stormwater permit‑related state mandates

—

—

4

Employee Compensation

Ratified labor agreements to achieve budgetary savings in 2025‑26 and 2027‑28a

—

—

6

Judicial

Pretrial release program

—

$20

5

Judicial

Jury duty pilot program

$14

13

—

Judicial

Trial Court Trust Fund unrestricted fund balance

—

38

—

Judicial

Court facilities architectural revolving fund reversions

—

34

—

LCI

California Education Learning Lab

—

—

4

OES

Flexible Cash Assistance for Survivors of Crime

—

50

—

SFP

Revert General Fund for School Facilities Program

—

178

—

State Preschool

Suspension of the statutory COLA

—

—

10

State Preschool

State Preschool excess funding

—

—

1

UC

Debt service savings, student housing projects

—

—

1

Totals

$14

$333

$172

aExcludes savings associated with suspension of employer OPEB prefunding contributions. While this policy reduces departments’ General Fund expenditures, it does not reduce overall state General Fund expenditures as the payments are made from Proposition 2 (2014).

CDCR = California Department of Corrections and Rehabilitation; CalAIM = California Advancing and Innovating Medi‑Cal; CSM = Commission on State Mandates; Judicial = Judicial Branch; LCI = Governor’s Office of Land Use and Climate Innovation; OES = Governor’s Office of Emergency Services; SFP = School Facility Program; COLA = cost‑of‑living adjustment; and OPEB = other post‑employment benefits.

Appendix 2, Figure 3

General Fund Spending Solutions in the 2025‑26 Spending Plan: Health

Excludes Proposition 98 (In Millions)

Department or Program

Description

2023‑24

2024‑25

2025‑26

CDPH

Workforce development and engagement program

—

—

$3

DHCS

Behavioral Health Service Fund offset

—

$40

100

DSH

Incompetent to stand trial program

—

—

161

DSH

Isolation unit staffing

—

—

22

DSH

Community‑based restoration and diversion

—

—

12

DSH

Operational efficiencies

—

—

5

DSH

Incompetent to stand trial evaluations

—

5

5

DSH

Court reporting requirements

—

—

2

DSH

Incompetent to stand trial grant program

$233

—

—

HCAI

Proposition 35 support for base rate increases

—

—

1,289

HCAI

CalRx construction funds

—

—

45

Medi‑Cal

Drug rebate aggregator

—

—

370

Medi‑Cal

SNF back‑up power

—

—

98

Medi‑Cal

Pharmacy step therapy protocols

—

—

88

Medi‑Cal

End of anti‑obesity drug coverage

—

—

85

Medi‑Cal

Enrollment freeze for adult UIS population

—

—

78

Medi‑Cal

HIV/Cancer drug rebates

—

—

75

Medi‑Cal

SNF Workforce Quality and Incentive Program

—

—

70

Medi‑Cal

Prior authorization for continuation of drug therapy

—

—

63

Medi‑Cal

Asset limit reinstatement

—

—

45

Medi‑Cal

Proposition 56 loan repayment program

—

—

26

Medi‑Cal

Prescription drug utilization management

—

—

25

Medi‑Cal

End of over‑the‑counter drug coverage

—

—

3

Medi‑Cal

Children and youth virtual supports platform

—

—

3

Totals

$233

$45

$2,672

CDPH = California Department of Public Health; DHCS = Department of Health Care Services; DSH = Department of State Hospitals; HCAI = Department of Health Care Access and Information; SNF = skilled nursing facility; and UIS = Unsatisfactory Immigration Status.

Appendix 2, Figure 4

General Fund Spending Solutions in the 2025‑26 Spending Plan: Human Services and Housing

Excludes Proposition 98 (In Millions)

Department or Program

Description

2024‑25

2025‑26

CalWORKs

Streamlining CalWORKs net savings impact

—

$18

Child Care

Suspension of the statutory COLA

—

61

Child Welfare

Bridge program reduction

$30

30

Child Welfare

FURS program reduction

9

9

DDS

Rate reform hold harmless expiration

—

75

DDS

Self‑determination program updates

—

23

DDS

Porterville Developmental Center

—

15

DDS

Implicit bias training

—

6

DDS

Health and Safety Waiver assistance

—

3

DSS

DSS operational improvements

—

75

HCD

Reversion of unspent prior‑year funds from three housing‑related programs

32

—

IHSS

Community First Choice Option late penalty

—

41

IHSS

Medi‑Cal asset test limit

—

16

Totals

$71

$371

COLA = cost‑of‑living adjustment; FURS = Family Urgent Response System; DDS = Department of Developmental Services; DSS = Department of Social Services; HCD = Department of Housing and Community Development; and IHSS = In‑Home Supportive Services.

Appendix 2, Figure 5

General Fund Spending Solutions in the 2025‑26 Spending Plan: Resources and Environment

Excludes Proposition 98 (In Millions)

Department or Program

Description

2024‑25

2025‑26

CalFire

Operational costs to GGRF

—

$1,000

CalFire

Training center

$32

—

CEC

Demand Side Grid Support Program

18

—

CEC

Offshore wind program to Proposition 4 (2024)

43

—

CPUC

Community Renewable Energy Generation Program

33

—

DTSC

Exide residential cleanup

35

—

DWR

Groundwater bulletin frequency

—

1

DWR

Dam safety to Proposition 4

47

—

DWR

Systemwide flood risk reduction to Proposition 4

15

—

DWR

Urban Streams Restoration Program

5

—

DWR

Systemwide flood risk projects

3

—

DWR

Urban flood risk projects

9

—

LCI

Extreme heat/community resilience to Proposition 4

—

15

Parks

Deferred maintenance to Proposition 4

14

—

Parks

Stewardship of state‑owned lands to Proposition 4

68

—

SWRCB

Water recycling to Proposition 4

51

—

WCB

Watershed climate resilience to Proposition 4

32

—

Totals

$404

$1,016

CalFire = California Department of Forestry and Fire Protection; GGRF = Greenhouse Gas Reduction Fund; CEC = California Energy Commission; CPUC = California Public Utilities Commission; DTSC = Department of Toxic Substances Control; DWR = Department of Water Resources; LCI = Governor’s Office of Land Use and Climate Innovation; Parks = Department of Parks and Recreation; SWRCB = State Water Resources Control Board; and WCB = Wildlife Conservation Board.