Governor Newsom’s Administration unveiled its proposed state budget on January 10th. The proposed budget avoids substantial cuts to existing funding commitments. However, the Administration highlighted several factors that could introduce economic volatility in the coming years. These include fluctuations in tax revenues, uncertainty stemming from the incoming presidential administration, and the ongoing impacts of wildfires ravaging Los Angeles County. According to the Legislative Analyst’s Office, California could face annual deficits exceeding $20 billion due to these uncertainties.

While the proposed budget offers some relief by averting major cuts, it falls short of addressing the critical day-to-day needs of Californians with disabilities. Persistent gaps remain in providing adequate housing, accessible transportation, and effective anti-poverty programs. Greater investment in these essential services is imperative, especially as the demand continues to grow.

We remain concerned about Proposition 36, which stiffens penalties for theft and drug use. Although the proposed budget does not contain increased funds for implementing Proposition 36, Governor Newsom has suggested that some state prisons slated for closure may need to remain operational to accommodate a potentially larger prison population—an apparent shift from his previous goal of reducing the state’s reliance on incarceration. The prospect of increased funding for prisons raises concerns about diverting resources from essential human services programs that address the root causes of theft and poverty.

On education, we commend the Administration’s continued investment in key programs for California’s school system. Despite a $1.6 billion decrease in overall education funding compared to 2024, the budget demonstrates a commitment to fully implementing Transitional Kindergarten (TK), after-school programs, universal school meals, and dyslexia screening. Part of the reduction comes from emergency COVID-19 relief funding that has since evaporated, along with weaker overall state revenues, which determine education funding. However, the passage of Proposition 2 in 2024 has enabled the allocation of $1.5 billion to TK-12 schools and $51 million for critical infrastructure improvements at California Community Colleges, addressing health and accessibility needs.

However, the Administration’s approach to homelessness remains troubling. Emboldened by the U.S. Supreme Court’s disastrous Johnson v. Grants Pass ruling, the budget proposes $100 million in encampment resolution grants to local governments with encampment-clearing ordinances. This policy incentivizes inhumane treatment of individuals who are unhoused without offering adequate solutions like permanent housing or temporary shelter. Meanwhile, the absence of additional funding for the Homeless Housing, Assistance, and Prevention (HHAP) Grant Program further undermines efforts to prevent homelessness. Coupled with the financial strain caused by the ongoing Los Angeles wildfires, the budget’s housing provisions fall short of addressing the crisis at hand.

The proposed budget also prioritizes expanding locked behavioral health facilities over funding community-based services. It reduces Medi-Cal funding for behavioral health by $230 million while allocating $96 million to build more locked facilities. These reductions, combined with payment reforms under CalAIM, have already led to the closure of numerous community-based behavioral health providers. Programs like CARE Court, which receive substantial funding despite their coercive and ineffective nature, further divert resources from proven, community-centered approaches to care.

Additionally, the budget does little to improve employment outcomes for Californians with disabilities. Governor Newsom’s ongoing initiative to eliminate 10,000 vacant state jobs—6,500 of which have materialized—further limits opportunities for individuals with disabilities to secure meaningful employment. This, combined with longstanding recruitment challenges, perpetuates cycles of poverty for Californians with disabilities. State agencies must be equipped with the resources and commitment necessary to recruit and retain people with disabilities. 

Uncertainty in the budget also brings additional uncertainty for undocumented residents in California. DRC is aware of increased cases of racial profiling by Border Patrol in Kern County and the renewed interest in Washington to tear mixed-status families apart using mass deportation tactics. DRC will monitor upcoming actions in the Legislature to authorize additional funding to the California Department of Justice to challenge federal actions that would upend civil rights. DRC witnesses firsthand the traumatic impact that forced separation has on families and on individuals with disabilities detained in Immigration and Customs Enforcement facilities. We encourage Governor Newsom to support efforts to limit collaboration between local law enforcement and federal immigration enforcement as the budget is being finalized.

The long-term prosperity of Californians with disabilities hinges on prioritizing investments in human services over prisons to address the foundational needs of California’s most vulnerable residents. Addressing housing insecurity, behavioral health gaps, and employment barriers will not only empower Californians with disabilities but also yield broader economic and social benefits. To ensure lasting progress, the state must establish permanent funding streams for social programs that address these systemic challenges, rather than relying on temporary or discretionary measures. Only by committing to sustained, equitable investments in human services can we create a more inclusive and resilient California for all.

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. For more information visit: https://www.disabilityrightsca.org.