Transcript Highlights:

• We are a line item in Congress's budget.
• from the 2025 enacted budget.
• For 2627, our CDPH budget includes $5.1 billion.
• Is this just part of the budget process?
• Budget, sub three.

Summary: The hearing began with an overview of the California Health and Human Services Agency, which described its 2026-27 budget, major departments, and strategic priorities, including behavioral health, housing and human services integration, children and youth, and aging/disability services. The agency also explained a technical CalHHS/CalHires budget adjustment tied to HR1 compliance and eligibility system work. No LAO concerns were raised on that item. The committee then heard from the Office of Youth and Community Restoration on its budget, its SB 823 realignment report, and related issues. OYCR said county-based realignment has generally succeeded but outcomes and readiness vary widely, and it recommended more climate surveys, youth advisory councils, stronger behavioral management, better programming, improved transition planning, and integrated longitudinal data systems. Members pressed OYCR on “net widening,” county-by-county trends, and the gap between the detailed recommendations discussed in hearing and the more general recommendations in the public report. OYCR also described problems with federal Title II grant timing and a pending $14 million administrative funding adjustment, and discussed implementation of the juvenile justice realignment block grant formula. The Ombudsperson division separately requested two new positions due to rising complaints, site visits, and records-access disputes with counties; LAO noted the proposal would create ongoing General Fund costs. Several other departments presented budget change proposals. The State Council on Developmental Disabilities requested $730,000 General Fund ongoing to cover an interagency administrative support gap with DSS; LAO had no concerns. EMSA presented its department overview, said its AB 716 ambulance-rate report has been delayed after resources were reduced, and requested funding for disaster-response vehicle replacement, IT security assessment work, and additional HR/legal staff; members questioned delays, compliance, and the ongoing General Fund impact. The Department of Community Services and Development sought reappropriation of LIWIP funds and explained a new Proposition 4 process for continuing the farmworker housing component. The Department of Rehabilitation requested authority for $60 million in additional federal funds and 54 positions to meet growing vocational rehabilitation demand, with no General Fund impact. The Department of Child Support Services presented its budget and a supplemental report on full pass-through of child support collections. Members questioned why local agency funding was being restored despite declining caseloads, and staff explained that staffing costs have risen faster than caseload declines and that additional funding is needed to maintain service levels. The supplemental report estimated full pass-through would cost about $150 million General Fund annually, or about $80 million for a state-and-county portion, with $3 million to $5 million in automation costs. Finally, the Department of Public Health gave a broad overview of its $5.1 billion budget and its State of Public Health report, highlighting improved mortality and life expectancy, declining overdose deaths and STI rates, persistent racial and regional disparities, and increasing public health emergency demands. CDPH also warned that federal funding threats and policy changes are creating major uncertainty for state and local public health systems.

Transcript Highlights:

• This is not about this year's budget.
• And we talk a lot about our budget, and we liken it to how California families do their own budget.
• So I applaud our budget chair, our colleague, who is also a So I applaud our budget chair, our colleague
• This ACA is not about this year's budget. It's about a budget 10 years from now.
• This ACA is not about this year's budget. It's about a budget 10 years from now.

Keywords: 988, house, all

Transcript Highlights:

• We'll consider Trump's budget requests.
• So it's 1% of the budget; you can eliminate it all, you're not going to balance the budget.
• Let's talk a little bit about budgeting.
• Congress seems to not care about a budget.
• With zero-based budgeting have for getting towards a balanced budget?

Transcript Highlights:

• The Senate Budget and Fiscal Review Subcommittee No. 4 will come to order.
• I'm here to support the budget request for CRD, as well as Senator Wiener's budget requests of $10 million
• We are here to support CRD's budget and Senator Wiener's budget ask of $10 million.
• We appreciate the Senate's budget plan.
• Year's budget for HAP 7 and a promise of more funding for HAP 8 and next year's budget.

Summary: The subcommittee opened with remarks on the Senate’s budget plan for affordable housing and homelessness, including a proposed $2 billion housing investment and full funding for HHAP rounds 7 and 8. The first major item was the administration’s housing reorganization and trailer bill package, which would codify the new Housing Development and Finance Committee (HDFC), consolidate multifamily housing finance programs into a one-stop application and award process, and shift some authority over bonds, tax credits, and the Affordable Housing and Sustainable Communities program. Administration officials said the goal was to reduce duplication, speed projects from award to construction, and improve accountability by aligning financing decisions. The LAO generally supported the streamlining concept but recommended changes to the proposed bond set-aside and earlier reallocation of unused bond authority, and suggested preserving flexibility for integrated applications and reporting back on the proposed 70/30 split for housing versus sustainable communities funding. Committee members, especially Senator Cabaldon, raised concerns that the new committee structure could add process and delay, and questioned whether the proposal was effectively repurposing the climate-oriented ASIC program into a housing finance tool without enough direct investment in core housing programs. Administration witnesses responded that the structure was meant to create transparency, public accountability, and simultaneous financing awards, and said the proposal was only a first step in a broader consolidation effort. Members also asked about specific programs such as the Joe Serna Farm Worker Housing Grant Program and the Sustainable Agricultural Lands Conservation Program, and staff said those would remain within the broader streamlined framework or the flexible sustainable communities allocation. The committee then heard from CDLAC and TCAC on federal tax credit changes and state housing finance. Staff explained that H.R. 1 increased the federal 9% LIHTC allocation and, more importantly, lowered the bond-financing threshold for 4% credits from 50% to 25%, allowing California to finance many more projects. They reported emergency regulations were adopted quickly to implement the change, resulting in 195 projects and more than 25,000 units in the 4% program, while the 9% program funded 58 projects and nearly 3,000 units. Members asked about the value of the state low-income housing tax credit program and rehabilitation projects; staff said state credits remain important for filling financing gaps and that a portion of bond and credit resources is now set aside for acquisition and rehabilitation. Finally, the Civil Rights Department reported on the effects of federal civil rights rollbacks and on three limited-term or expiring programs: California vs. Hate, the Community Conflict Resolution Unit, and Investigations and Conciliation Enhancement. Director Kevin Kish said federal closures and funding cuts have increased demand on the department, which now has more than 12,000 open matters, up from 8,700 a year earlier, and a six-month wait for intake interviews despite overtime triage and early case screening. Members urged continued funding for the programs, arguing they are essential as federal protections weaken; department staff said California vs. Hate connects callers quickly to support services, the conflict resolution unit fills a gap left by the shuttered federal counterpart, and the limited-term investigators have helped reduce wait times even as filings continue to rise.

Transcript Highlights:

• state budget.
• Instead, the budget proposal includes additional policies that will further cut off Instead, the budget
• in this year's budget proposal.
• So, as proposed in the Governor's budget, in the budget year, we estimate 289,000 individuals will lose
• So that gets you to about 720,000 in the budget year. In the budget year.

Summary: The Assembly Health Committee held an informational hearing on the impact of federal H.R. 1 and related state budget actions on California’s health care system. Opening remarks framed the federal changes as a major threat to Medi-Cal, Covered California, hospitals, clinics, and the broader safety net, with warnings that millions could lose coverage and that costs would shift to providers, counties, and consumers. Testimony from the California Health Care Foundation and the Legislative Analyst’s Office focused on implementation challenges, the administrative burden of work requirements and more frequent renewals, the loss of federal funding, and the need for California to consider long-term structural changes to Medi-Cal, county safety-net programs, and cost containment. A Covered California enrollee, Chas Franklin, described sharply rising premiums for his family after losing subsidies, illustrating the personal impact of federal policy changes. Committee members raised concerns about whether premium increases were driven by H.R. 1 or insurer pricing, the cost of rebuilding county-based indigent care systems, and the need to account for the cost of inaction. Dr. Hernandez pointed to pre-ACA models such as Healthy San Francisco as examples of coordinated local safety-net care, while also emphasizing the importance of primary care, data interoperability, and the Office of Health Care Affordability in reducing waste and improving access. Department of Health Care Services officials then outlined the state’s implementation plan for H.R. 1, including work requirements, six-month redeterminations, reduced retroactive coverage, cost-sharing, and immigration-related eligibility changes. They said the department would try to automate eligibility checks, expand outreach, and train counties and partners, but estimated up to 2 million Californians could lose coverage over time. Covered California reported that the expiration of enhanced federal premium tax credits and new federal marketplace rules are already raising costs and reducing enrollment, with an estimated 400,000 enrollees at risk of dropping coverage. County, hospital, and safety-net representatives warned that coverage losses will increase uncompensated care and strain local systems, while one coalition proposed a temporary state-funded coverage option as a bridge if full-scope Medi-Cal cannot be maintained. The hearing concluded with a policy analyst urging stakeholder engagement, immigrant protections, and new state revenue options to preserve coverage and offset federal cuts.

Transcript Highlights:

• </c> into the budget HP2. I will second it. into the budget HP2. I will second it.
• budget?
• </c> 1242H back of the budget cut. Okay. 1242H back of the budget cut. Okay.
• the budget balances.
• It's what's in the budget. budget. budget.

Keywords: 928, house, all

Summary: The committee first took up House Bill 733, a third-party litigation financing reporting bill. Representative Cole explained that the bill shifts reporting from the Secretary of State to the courts, which he said removes the fiscal note and helps insurers obtain information for underwriting and premium-setting. The committee accepted the explanation and voted ought to pass; the roll call was 8-0 in favor, with one member taking a pause. The committee then heard House Bill 219, dealing with the renewable portfolio standard and the renewable energy fund. Representative Bose argued the bill would reduce electricity costs by lowering the REC purchase obligation from 220,000 to 170,000, which he said would reduce payments into the renewable energy fund by roughly $1 million to $2 million and save consumers only pennies a month. After questions about timing and whether to wait for a DOE report, the committee voted to retain the bill for further discussion rather than advance it; the motion to retain passed 5-4. House Bill 365 was then discussed as an election-related bill intended to help verify citizenship for voter registration and create a voucher process for people who cannot afford a birth certificate. The sponsor said the Secretary of State may be able to use federal and state databases to verify citizenship, and if not, indigent applicants could receive a voucher reimbursed by the state, with a $25,000 appropriation included. Members raised concerns about the Secretary of State’s access to databases and the bill’s timing and cost, and the committee decided to hold the bill until Secretary Scanlan could come testify. Finally, the committee heard House Bill 552, which updates retiree health coverage rules so dependent children can remain on the plan until age 26, consistent with the Affordable Care Act. DAS officials said retirees pay the full cost for dependents, about $1,000 per month, while the state covers only the retiree and spouse. The committee voted ought to pass unanimously, 9-0. The committee then began discussion of House Bill 572, a housing bill aimed at missing-middle housing, describing a voluntary program to identify developable public land, support construction, and streamline review, but the transcript cuts off before any action on that bill.

Transcript Highlights:

• Pease, I'm still seeing in your budget, every budget, every line item has state overtime.
• My budget is gone. You know, and so sometimes we're able to backfill. My budget is gone.
• This is a maintenance budget.
• Certainly, we have not budgeted for that $500,000 in our budget.
• We want you to give us a budget that you have decided is a reasonable, fair budget for you, and don't

Summary: The Joint Committee on Ways and Means held its sixth public hearing on the Governor’s FY27 H-2 budget proposal, focused on public safety and judiciary agencies, at the Foxborough Community Center. After opening remarks and local welcomes, the committee heard testimony from the Executive Office of Public Safety and Security (EOPSS), led by Secretary Gina Kwan, who described the $1.72 billion budget as a 4% increase over FY26 and emphasized readiness, local partnerships, and support for core operations rather than expansion. She highlighted ongoing work on firearms-law implementation, State Police academy reforms, DOC’s new strategic plan, disaster response, hate-crime prevention, and planning for major 2026 events including the World Cup, Marathon, and America’s 250th anniversary. Members also raised concerns about State Police capacity, DNA backlog reporting, academy boxing/training reforms after a trooper’s death, ICE coordination, diversity in public safety leadership, the disaster relief fund, crime lab funding, reentry programming, and whether OEMS should move from DPH to EOPSS; Kwan said she would keep an open mind on some issues but was not ready to commit to an OEMS transfer. The committee then questioned EOPSS officials and the State Police colonel on several operational matters. The colonel said the academy boxing program remains suspended and likely will not return in its prior form, pending an IACP review, and that future training will likely emphasize jujitsu-style control techniques. He also said the State Police uses the civil service exam, with current advancement scores ranging from 83.72 to 98.78 for the most recent class, and acknowledged the need to improve recruitment, preparation, and diversity. On the DNA and sexual assault kit backlog, EOPSS said it supports extending the statute of limitations and is working with the courts and crime lab to identify and collect lawfully owed DNA. On disaster preparedness, officials said the new disaster relief fund is being developed with MEMA and A&F, is currently capitalized at $14 million with another $14 million expected, and should be designed to respond flexibly to different regional needs. They also said the crime lab increase is largely to cover core operations and a structural deficiency rather than expansion. Several members focused on public safety coordination and staffing. Questions from legislators from Bristol, Plymouth, Cape Cod, and elsewhere stressed the need for State Police to absorb additional forensic work if county resources shift, and to maintain strong communication with local chiefs and federal partners. Rep. Holmes pressed EOPSS on racial and gender diversity in the department and State Police; Kwan and Colonel Noble said diversity has improved but will take time to show up in senior leadership, and they pointed to internships and hiring practices as ways to broaden the pipeline. The hearing also included discussion of the World Cup security plan, with Kwan saying planning has been underway for about 18 months through 14 working groups and that current staffing and overtime resources appear sufficient for now. After EOPSS concluded, the committee recessed briefly and then began testimony from district attorneys, led by Suffolk DA Kevin Hayden, who said prosecutors are seeking a 10% budget increase to address staffing and salary pressures, especially the widening pay gap between assistant district attorneys and newly hired public defenders after recent CPCS funding increases.

Transcript Highlights:

• We have made one modification to the budget request that was filed in October, and that is on budget
• , and your budget in particular?
• It's flat budget.
• You didn't ask for a budget. You have flat budget, so I'm assuming you're doing okay.
• It's called a budget request or a budget ask. I'm just going to tell you it's a budget requirement.

Summary: The subcommittee heard budget presentations and questions from several health and human services agencies, with members repeatedly emphasizing that agency numbers had been posted since October and that questioning should stay focused and brief. The Office of Juvenile Affairs said its $5.45 million request would support 162 employees receiving a pay adjustment, and members asked about juvenile care conditions and staffing. The Department of Human Services discussed major changes to child care subsidy funding, including a reduced subsidy request, a $11.5 million child care teacher recruitment/retention request, and planned eligibility and reimbursement changes; it also reviewed SNAP administrative cost shifts under federal law, the state’s SNAP error rate, and the risk of large future state costs if the error rate is not reduced. DHS also addressed TANF reserves, the DDS waiver wait list, the Greer Center buildout, the Advantage waiver supplemental, and meal service options for waiver members. OCCY described a largely personnel-driven budget, requests for more oversight staff, and workload pressures in juvenile competency evaluations. The Office of Disability Concerns reported a flat budget and said it relies mainly on mediation and informal resolution rather than enforcement. OSU Medical Authority said its Tulsa expansion, VA skybridge, and c-section suites remain on schedule, that psychiatric residency funding is being phased in over several years, and that it is working to reduce contract labor and evaluate service lines. J.D. McCarty Center reported its new ABA outpatient clinic is on time and on budget and is nearing full capacity. OMMA said its lab is following required standards, its FTE count is below budgeted levels because hiring depends on lab accreditation and other unknowns, and dispensary numbers continue to decline as the market matures. Oklahoma Rehabilitation Services said it needs about $1.4 million to avoid a maintenance-of-effort penalty and discussed aging campus capital needs and staffing vacancies. The Oklahoma Health Care Authority then outlined a very large budget requirement driven by utilization growth and the shift to value-based care, saying FY26 is currently stable but FY27 would likely require additional appropriations if the request is not fully funded.

Transcript Highlights:

• As I mentioned, our budget increase largely reflects non-discretionary spending As I mentioned, our budget
• Health care is a budget buster.
• budgets and other parts of our big picture.
• Our final slide is our budget request.
• So with respect to our FY27 budget request, I'll start by saying that our budget appropriation is set

Keywords: 1212, all

Transcript Highlights:

• :04:28.800><c> in</c> Recent significant budget shortfalls in Recent significant budget shortfalls in
• The current statute already requires a draft budget by January 31st, a tentative budget by May 31st,
• your budget of 1.9 billion?
• Aye. approve budgets. We approve policy. We approve budgets. We approve policy.
• </c> general fund budget goes to education. general fund budget goes to education.

Keywords: Call to Order and Roll Call: 0:00:08 26RS SB 3: 0:02:50 26RS SB 1: 0:21:12, 958, all

Transcript Highlights:

• And that is on budget request number 5.
• Within the budget, the budget request number 6, which is childcare teacher recruitment and retention,
• and your budget in particular?
• Everything we want to do is either budget positive or budget neutral. neutral and thus far ABA has fallen
• request or budget ask.

Keywords: 914, all

Transcript Highlights:

• </c> going on in that budget. going on in that budget.
• Um hearing from the the budget.
• </c><00:03:50.080><c> from</c> budget holds education proposals from budget holds education proposals
• </c><00:04:29.600><c> process</c> this is part of the budgeting process this is part of the budgeting
• or Democrats were writing their budget or Democrats were writing their own<00:09:26.959><c> budget,<

Keywords: 1187, senate, all

Transcript Highlights:

• I really wish that the costs of the budget would be balanced on the budget.
• I really wish that the costs of the budget would be balanced on the budget.
• Cutting IHSS is not a budget decision.
• Lacking robust data on program dynamics, the state in previous periods of budget challenges enacted budget
• The department's January budget projections for the budget year do not incorporate any of these potentially

Summary: The subcommittee heard an overview of the governor’s IHSS budget proposals and extensive testimony from the Department of Social Services, Department of Finance, the Legislative Analyst’s Office, county representatives, labor, consumer advocates, and advocates for older adults and people with disabilities. The administration described IHSS as a large and growing program serving more than 900,000 recipients, and outlined three proposals: shifting the cost of growth in authorized hours per case to counties, eliminating the backup provider system, and aligning IHSS terminations with Medi-Cal terminations. The LAO said the overall budget estimates appeared reasonable but raised concerns about the hours-per-case proposal, including the lack of a comprehensive root-cause analysis, the limited control counties have over statewide cost growth, and uncertainty about how the baseline and savings would work. CWDA, SEIU, and consumer advocates strongly opposed the hours cost shift, arguing that counties use state-designed tools, that demographic changes and rising need explain much of the growth, and that the proposal would pressure counties to cut services and destabilize care. The chair and members repeatedly questioned the administration about the proposed baseline, the claimed savings, and whether the measure effectively circumvents the county maintenance-of-effort agreement. On the backup provider system, the administration said the statewide program is underutilized and administratively expensive, and proposed eliminating it to save about $3.5 million. The LAO suggested the Legislature consider whether administrative costs could be reduced while preserving some version of the program. County and consumer advocates opposed the cut, saying the system is a critical safety net when regular providers are unavailable, especially in rural areas and for people with complex needs. They argued that low utilization reflects the difficulty of finding emergency backup care, not lack of need, and that many counties already rely on local backup systems or other models. Committee members also pressed for better data on requests, fulfillment, and administrative costs, and discussed whether the state could support local alternatives instead of eliminating the program. The final topic was the proposal to align IHSS terminations with Medi-Cal terminations by automating the process when recipients fail to complete Medi-Cal redeterminations. The administration said this would reduce General Fund costs by about $86 million by preventing payment of IHSS in the residual program when recipients are no longer eligible for Medi-Cal, while also automating reinstatement when Medi-Cal is restored. The LAO noted the proposal has been rejected in prior years and suggested improved notice and communication to recipients as an alternative. CWDA and advocates warned that the change could create gaps in care, especially for people who lose Medi-Cal for procedural reasons, and urged additional safeguards such as better notices, faster reprocessing, and automatic reinstatement. Members questioned how many people would be affected, how the residual program currently works, and whether providers could go unpaid during the gap; the department said the automation is already built and would be activated if the proposal is approved. No votes were taken during the discussion, and the committee moved through public comment and questioning without final action on the proposals in the excerpt provided.

Transcript Highlights:

• That's reflected in our budget request.
• And, student, the statewide student information system budget is in all the budgets Just in different
• So they got the full budget The same budget that a regular district school would get.
• about how to set budgets.
• We do budget planning with our budget directors at the school and district levels.

Keywords: 996, all

Transcript Highlights:

• <c> serving</c> proposed and enacted budgets and serving proposed and enacted budgets and serving as<
• </c> $169.2 million this um program budget $169.2 million this um program budget area<00:15:29.279><c
• </c> base moving on to the fourth budget base moving on to the fourth budget program<00:20:20.159><c>
• </c> million moving on to the final budget million moving on to the final budget program<00:21:54.360
• </c> talks about the governor's budget which talks about the governor's budget which I<00:27:17.480><

Keywords: 1183, house

Transcript Highlights:

• Here we are on Monday, well over a month past the budget due date now, enacting our ninth budget extender
• A month past the budget due date now, enacting our ninth budget extender of this season.
• nine budget bills in place for us to consider?
• , ninth debate on these budget extenders, over a month late with our budget.
• We have nine budget bills that have not been done.

Keywords: 993, senate, all

Summary: The Senate convened with ceremonial opening proceedings, approved the prior journal, and then moved through a series of calendar actions, including discharging and substituting identical companion bills from committee and restoring several bills to the Third Reading Calendar after reconsideration. The chamber also took up a supplemental budget calendar and a controversial supplemental budget extender, with Senator O’Mara questioning the delay in final budget negotiations, the size of the extender, table targets, and unresolved policy issues such as auto insurance reforms, SEQRA, New York for All, and CLCPA changes. Senator Serrano responded that negotiations were ongoing and that the extender was a clean measure to keep state government functioning. The budget extender bills were then passed, with Senator Weik voting in the negative on one of them. The Senate also adopted a resolution memorializing May 4, 2026, as 10th Mountain Division and Fort Drum Day, and hosted Major General Scott Naumann and other Fort Drum leaders and soldiers for remarks on the division’s deployments, readiness, economic impact, and requests for continued state support on items such as microreactors, health care, DMV services, dining facilities, airports, and mineral-related development. The Fort Drum resolution drew extensive bipartisan praise from Majority Leader Stewart-Cousins, Minority Leader Ortt, Senator Scarcella-Spanton, Senator Ashby, Senator Walczyk, and others, who emphasized the division’s military history, its role as a major employer and economic driver in Northern New York, and the sacrifices of service members and their families. Several senators highlighted individual soldiers in attendance and their service records, while the resolution was opened for co-sponsorship and adopted. The Senate also recognized a visiting child author, Thomas Ortiz, who was introduced for publishing a book encouraging kindness and friendship. After the ceremonial segment, the Senate returned to regular business and passed a series of bills on the calendar, including measures affecting environmental conservation, executive law, public service, education, public authorities, real property tax, criminal procedure, election law, and civil rights. Some bills drew negative votes from a bloc of senators, particularly on the environmental, criminal procedure, election, and civil rights measures, but all listed bills were ultimately passed. The Senate then adjourned until the next day.

Transcript Highlights:

• I want to present the beginning of our FY27 budget recommendation.
• Disciplined budgeting helps avoid reactionary problems.
• So we have a great budget framework to start.
• into the next executive's budget.
• But that's the difference in the budgeting you'll see.

Keywords: 996, all

Transcript Highlights:

• But within this budget itself, Within this budget itself, one of the things that we're trying to address
• So I understand not liking this budget.
• this budget, but it's not a reflection of the budget.
• is the enhancement budget.
• I think that's it on that budget.

Summary: The House convened, took roll, approved the journal, and received several communications, including notice that Randolph J. Hill was designated as a substitute member for District 14, Seat A. The chamber also received Senate messages on enrolled and passed measures, including Senate Bill 1396 and Senate Concurrent Resolution 127, and reported action on multiple House bills that had passed the Senate or been enrolled for signature. House Bill 969 and House Bill 970 were introduced and sent for printing, while Senate Bill 1436, relating to state procurement and cooperative/group discount purchasing, was introduced and referred to committee. The main floor work focused on budget bills. The House suspended rules and passed Senate Bill 1432, the Health and Welfare indirect services/licensing and certification budget, after discussion of a modest increase tied to board repeals, replacement items, and IT modernization. The chamber then debated and passed Senate Bill 1433, the large Health and Welfare Medicaid budget, with extended debate over Medicaid expansion, child welfare, federal matching funds, provider rate cuts, supplemental costs, and whether policy changes should be made outside the budget process. Members also passed Senate Bill 1434, the Division of Welfare budget, which included changes for SNAP administration costs, Medicaid expansion work requirements, and eligibility system updates driven by federal law and prior state changes. The House also passed Senate Bill 1437, a trailer appropriation for Idaho State Police to fund DNA and thumbprint sampling for certain misdemeanor offenses, and House Bill 968, a year-end transfer bill that moved funds to support the bottom line, including reversion language for payroll funds and transfers involving interest and other accounts. Debate on House Bill 968 included criticism that the legislature was leaving money in reserves while cutting services. Later, after recess, the House returned and passed Senate-amended House Bills 730, 758, and 928, which dealt respectively with SNAP eligibility timing, daycare licensing language, and merit-based health care/occupational hiring provisions. The House then adjourned until the next morning.

Transcript Highlights:

• Welcome to our Assembly Budget Subcommittee No. 3 on Education Finance.
• Looking ahead to the budget year, we are encouraged by the increased— Looking ahead to the budget year
• here and this little budget there.
• changes to the state library budget.
• The Governor's budget reflects this reality.

Summary: The subcommittee on Education Finance heard an overview of the governor’s budget proposals and higher education financial aid trends, with a major focus on the Middle Class Scholarship (MCS), Cal Grant spending, and the effects of recent federal student aid changes. The Department of Finance said the budget would fully fund Cal Grant at projected levels and reduce MCS coverage from 35% to 17.5% of unmet need in 2026-27, while the Legislative Analyst’s Office supported considering the reduction as a cost-saving measure given out-year deficits. UC and CSU representatives opposed the cut, saying MCS is important to affordability and debt-free degree goals; they estimated average awards would fall substantially and that campuses do not have funds to backfill the loss. The Student Aid Commission said the proposal would reduce aid but simplify administration, and members questioned how lower awards would affect students, borrowing, and work-study options. No vote was taken, and the issue was held open for possible future action. The committee then discussed federal changes to student loans and Pell Grant policy under H.R. 1, including caps on Parent PLUS loans, elimination of Grad PLUS loans, and new proration rules for federal direct loans based on enrollment intensity. The LAO said these changes would likely push some borrowers into the private market, especially graduate and professional students and some parents of students at private institutions. CSU said the changes would affect thousands of graduate and part-time students and could reduce access by about $97 million in loan availability for part-time borrowers, while UC said the new definitions of professional degrees were too restrictive and would reduce access for nursing, teaching, law, dentistry, and other programs. Community colleges said they use relatively little federal loan aid but are monitoring Workforce Pell. Members raised concerns about workforce impacts, social mobility, and whether the state should consider alternative loan programs or other ways to reduce student costs. This issue was also held open. In the segment financial aid update, the LAO reported Cal Grant spending is projected to rise to about $3.2 billion in 2026-27, driven by more recipients and higher awards tied to UC and CSU tuition increases, while CSAC said FAFSA and CADAA applications are up significantly year over year. CSU, community colleges, and UC described their aid packaging and rising aid totals, with CSU reporting over $5.5 billion in aid to 381,000 students, community colleges reporting over $4.3 billion to more than 920,000 students, and UC reporting $3.17 billion in grant aid to undergraduates. Members asked about Cal Grant reform, application trends, and long-term outcomes; UC and community colleges pointed to alumni and wage dashboards, and the LAO noted the state’s Cradle to Career data effort. The committee then took public comment, including testimony on library funding and other education-related priorities, and concluded by holding the issues open without formal action.

Transcript Highlights:

• state budget.
• and what has been proposed in this year's budget proposal.
• So, as proposed in the Governor's budget, in the budget year, we estimate 289,000 individuals will lose
• That is 25% of our health system's budget.
• System from the ongoing cuts and budget challenges.

Keywords: 988, house, all