This week, Governor Newsom signed the 2026-27 California state budget act into law. This final budget rejects many of the worst cuts to disability services that had been initially proposed by the administration.

Key Provisions Impacting Californians with Disabilities

On healthcare, the final budget:

• Contains no direct cuts to In-Home Supportive Services (IHSS). The back up provider program and the residual program will remain in effect.
• Lowers the asset limit for certain Medi-Cal populations from $130,000 to $21,000 in July of 2027 instead of the proposed $2,000 asset limit in July 2026. Although this lower asset limit is frustrating, the higher amount and longer lead time allows disabled people and older adults to plan their finances, and we plan to hold the Legislature to their commitment to secure a higher asset limit in future budget years.
• Keeps access to full-scope Medi-Cal for certain humanitarian immigrants through July 2027, but does not keep funding full-scope access for them after that point.

On mental health, the final budget:

• Maintains state funding for mobile crisis response services for this fiscal year (until the end of June 2027);
• Maintains full funding for the Behavioral Health Innovation Partnership Fund; and
• Maintains funding for behavioral health community advocacy and engagement.

On housing and homelessness, the final budget:

• Includes $700 million for affordable housing programs including the Low-Income Housing Tax Credit (LIHTC) program and the Multifamily Housing Program; and
• Provides $900 million for Round 7 of Homeless Housing Assistance and Prevention (HHAP) grants to support local responses to homelessness.

The final budget agreement is the result of extensive advocacy from disabled Californians

Disabled people, family members, and allies showed up at the Capitol for hearings that went late into the evening, made countless phone calls to policymakers, and shared hundreds of personal stories. The final agreement between the Legislature and Governor reflects this immense effort. This relentless advocacy reminded decisionmakers that disability services are more than budget line items: they are key services that uphold our civil rights.

Still, the agreement leaves major concerns unresolved:

• Future healthcare access remains uncertain, especially because of the planned reduction in the Medi-Cal asset limit and the lack of long-term coverage protections for immigrant communities;
• Behavioral health services are still stretched thin, and communities need more stable, sustained investment to meet people’s needs before they reach a crisis point; and
• Housing funding is still not enough to meet the scale of California’s affordability and homelessness crisis, especially for disabled people who need accessible, affordable homes.

Although the final budget does not do everything we hoped for, it reflects the needs of disabled Californians far better than earlier proposals. “Advocates should be proud of what they achieved this year,” said Eric Harris, Associate Executive Director of External Affairs at Disability Rights California. “And this is also a reminder that progress has to be defended, strengthened, and carried forward.”

Media Contact

Eric Harris
Associate Executive Director of External Affairs, Disability Rights California
(916) 504-5940
Eric.Harris@disabilityrightsca.org

Disability Rights California (DRC) – Is the agency designated under federal law to protect and advocate for the rights of Californians with disabilities. The mission of DRC is to defend, advance, and strengthen the rights and opportunities of people with disabilities.