June 3rd, 2026
On May 14, Governor Newsom released his revised 2026-27 budget proposal, known as the “May Revise.” The revision builds on his January proposal (click here for a refresher), incorporating the latest economic data. Since the revise was released, the Legislature has been reviewing and negotiating the proposed budget, which they must vote on by June 15th.
While there are some positives in the May Revise, it’s critical that education be fully funded, that promised child care slots are included and that the state take more assertive action in response to H.R. 1 Medicaid cuts. Check out the highlights below to see how the proposal impacts specific programs and services that support kids’ well-being.
- CalWORKs Home Visiting Program: Funding for the 2025-26 budget year remains at $95.6 million, ensuring stability for this year’s funding. However, the budget amount has decreased slightly for the 2026-27 budget year, going from $121.7M to $118.5M due to reduced caseload projections.
- California Department of Social Services (CDSS) Child Care Programs: There is a proposed $7.5 billion in total spending for the CDSS child care programs.
- General Child Care and Alternative Payment Program Slot Reductions: This is a state and federally funded child care subsidy for low-to-moderate-income families to manage the costs of child care. May Revise proposed a reduction of 6,800 slots for both the General Child Care program and the Alternative Payment Program, along with a reduction of approximately $98 million in ongoing federal and Proposition 64 funds. $65.1 million in ongoing funds is proposed for the Alternative Payment Program for administrative costs.
- Providers Impacted by Wildfires: $28 million is proposed to go to child care providers impacted by wildfires. This funding comes from a combination of one-time federal funding and the Child Care Infrastructure Grant Program.
- State Preschool and Child Care Reduced Cost-of-Living Adjustment (COLA): There is a proposed cut to the child care and state preschool COLA from 2.87% to 2.01%, which may accelerate districts pulling back from the program due to reimbursement rates not covering costs.
- Covered California: There is additional financial help for low-income families through an additional $300 million in premium subsidies for some Covered California enrollees.
- Other Investment Wins: Investment wins include full funding for the universal school meals program, funding for public health IT infrastructure, such as MyCAVax, which supports childhood immunization rates, Managed Care Organization tax dollars to support the Medi-Cal program and maintain targeted rate increases for primary, maternal, and non-specialty mental health care.
- Federal Cuts to Medi-Cal: The new work reporting requirements in H.R. 1 are expected to have harmful impacts on Medi-Cal enrollment. An estimated 44,000 people are expected to disenroll in 2026-27, potentially growing to 1.3 million by 2029-30. Should parents lose Medi-Cal coverage due to this new requirement, children may lose coverage along with their families.
- Change in Medi-Cal Coverage for Immigrants: Additionally, the May Revise proposes $50 monthly premiums for certain low-income immigrant adults aged 19 to 59 enrolled in Medi-Cal. These enrollees would be moved out of managed care and into fee-for-service and limited care. Families in fee-for-service Medi-Cal coverage have difficulty finding providers and are at risk of losing access to benefits only accessible through a managed care plan.
- Other Children’s Services Vulnerable to Cuts: Services specific to children’s health needs are also at risk of reductions, including: applied behavioral analysis therapy for kids with autism; transportation services to get to appointments; Medi-Cal Enhanced Care Management benefit reductions to care coordination for children with special needs, foster youth, or with behavioral health needs; changing mobile crisis services from a county mandate to instead be optional; and not restoring Medi-Cal Dental provider incentive payments, potentially causing a reduction in children’s access to dental care.
- Funding Distribution: The May Revise proposed approximately $12 billion in new resources for TK-12 education due to higher-than-expected tax revenues, along with lower student enrollment. $6.2 billion of those new funds would go to the Prop 98 Rainy Day Fund, $907 million would fund an extra COLA for school districts, along with $1.8 billion to additional special education funding. $5 billion would go to flexible block grants for districts to use for teacher recruitment, professional development, and dual enrollment programs; $500 million will go to reading coaches, literacy specialists, and math professional development; and $45 million will go to teacher residency programs and school leadership academies.
- Education Governance Reform: In addition to the funding proposal, the Governor is moving forward with the restructuring of California’s K-12 education governance. This involves the creation of an Education Commissioner to oversee the California Department of Education and establish the Office of the State Superintendent of Public Instruction as a standalone entity. The Education Commissioner would be tasked with developing recommendations for a second phase of governance reform by October 2027.
- “Super COLA”: The “Super COLA” for the Local Control Funding Formula would add approximately $640 million in targeted funding for low-income students, English learners, and foster youth, along with special education.
- Community Schools Partnership Program: Community schools are pre-K-12 campuses that use a “whole-child” approach by partnering with community resources to support students’ academic, health, and social service needs. $485 million has been reappropriated from the existing Community Schools Partnership Program to community schools, expanding the model to serve more high-need students, including youth in foster care. This builds on the proposed $1 billion ongoing funding for community schools in the Governor’s January budget proposal.
- Foster Youth Services Coordinating Program (FYSCP) COLA: There has been a 2.87% COLA to support specified educational programs, including the FYSCP.
- Funding for Students Experiencing Homelessness: The proposed budget includes $30 million in one-time Proposition 98 General Funds for grants to local educational agencies to increase identification and improve outcomes for students experiencing homelessness. These funds will supplement existing federal McKinney-Vento Children and Youth grant program funds to expand program access.
- Social Work Workforce Pipeline: The proposed budget includes $18.4 million in one-time General Funds to support students in Bachelor of Social Work and Master of Social Work programs and bridge updated cost-sharing ratios to align training with reimbursement rates for eligible foster youth.
