In January, Governor Newsom proposed amendments to the state budget, some of which impact children with disabilities. Currently, the Assembly and Senate are reviewing these proposals and developing trailer bills to be passed containing the legal language that goes with the main budget bill in order to reform some government systems.
These are proposals; there is still time to contact your state Assemblymember or Senator and explain why your family might be affected by these changes.
The budget process starts with the governor proposing a budget in January, and the Assembly and Senate discuss the proposals. Then comes the May revise, where the budget is adjusted to take account of the actual tax revenue coming in. (For more information, visit the Budget Academy. Disability Rights California also provided a useful Summary of The Governor’s Proposed 2026-27 Budget.)
We took a look at the proposed changes in the budget trailer bills as they are developing and some of the reactions from the disability community. Looking at education, we have friction between the governor, who wants to defer a substantial amount of Prop 98 money, and the publicly funded schools and organizations that represent them, who say that this money belongs rightfully to the schools and they need it now. Within that battle, there are many who are citing the increasing cost of special education. But how will the proposal actually impact children with disabilities and the services offered in your child’s IEP?
The budget proposes an increase of $2.4 billion for the Department of Developmental Services, which provides funding for Regional Center services, but this increase has to serve an increased projected caseload from 489,254 participants to 526,848. DDS will save $8.1 million by shutting down the last State Developmental Center at Fairview, but they also believe that they can save $22.5 million in the Self-Determination Program.
Trailer bills will also focus on facilitating employment services for people served by both agencies by working with the Department of Rehabilitation (DOR) and making changes to the 4731 complaint process to align with the federal access rule.
We took a closer look at these proposals to identify ways that children and young adults with disabilities might be impacted.
The trailer bill language strikes out the word “consumer” in the Welfare Code that governs Regional Center and replaces it with "individual" throughout. It is a technical change and is seen as a person-first language cleanup. Previously, 1992 amendments to the Lanterman Act changed participants in the Regional Center system from “clients” to “consumers.”
No funding cuts have been proposed to traditional Regional Center services as of publication date.
Many advocacy organizations, such as Disability Voices United and Disability Rights California, have voiced concerns about the budget’s plan to reduce Self-Determination Program funding by $45 million. This is equivalent to a cut of 12% in each participant’s current budget, according to Disability Voices United. However, the trailer bill language does not explain the plan to cut SDP costs, other than the expected growth in new participants is not manifesting itself.
What parents need to know: Regional Centers have not been asked to cut everyone’s individual SDP budget. As your child grows, their needs change, and the budget should change with them. However, expect the possibility for Regional Centers to cut any unused budget, review large cost items, and seek to lower costs by looking for generic services (services from other providers such as health insurance, the school district, or non-profits).
The matching trailer bill language doesn’t give us a lot of clues about where the cuts might come from. The SDP framework stays largely intact.
The only substantial change to the SDP budget is in how the federal financial participation (FFP) funds generated by SDP participants are used. Currently, they first go to offset DDS's administrative costs such as criminal background checks. The remaining funds go into a pool that DDS uses flexibly to support independent facilitators, help build individual budgets, fund outreach to underserved communities, and cover Regional Center operations costs related to SDP. If this trailer bill passes, all the FFP funds would only be used to cover DDS's administrative costs. There will be no funding allocated to the local SDP committees. Whatever is left over stays with the state.
What parents need to know: Eliminating the flexible funding pool is a quiet but meaningful cut. It won‘t necessarily end spending on independent facilitators for initial planning meetings, local SDP committees, and outreach to communities that are underrepresented in SDP enrollment, but those programs will depend on the Regional Center making funding decisions.
DDS is required to establish standardized statewide processes and procedures by March 1, 2027, covering enrollment, individual budgets, spending plans, financial management services, and access to transition supports. This is an important step to addressing the biggest problem with SDP implementation: that it varies significantly from one Regional Center to another, and families in some catchment areas face more barriers than others.
The standardization requirement is a genuine win that advocates have pushed for. Watch for the DDS stakeholder process on those standards opening in 2026, when there will be a 45-day public comment period before anything is finalized. That will be a meaningful opportunity to shape how SDP actually works on the ground across all 21 Regional Centers in the state.
Also, note that the SCDD has already taken over providing SDP orientation for all new families statewide.
Trailer bill language proposes significant changes to how Regional Center boards are structured and governed, with a push toward “professionalized” boards. Disability Rights California warns that this could undermine the inclusion of people with developmental disabilities or their family members in decision-making, a core value at the heart of the original Lanterman Act. The language proposed no longer requires that 50% of board members be individuals served by the Regional Center or their families, and it proposes credential requirements that could exclude self-advocates and families from historically underserved communities.
What parents need to know: The new language no longer requires any representation from Regional Center participants or their families and instead requires that they have expertise in the practice of law, management, board governance (beyond being in the Regional Center board), financial and developmental disability programs, and at least three years of service or program administration beyond personal or family lived experience with a developmental disability. This will privilege individuals who serve participants rather than those with lived experience.
DDS sets rates that Regional Centers are allowed to reimburse service providers — companies or non-profits that provide job coaching, day programs, supported living, and personal care. For a long time, the rates were too low for providers to pay their workers decent wages, so good workers left, especially in areas of the state with a high cost of living. Additionally, in some cases, two providers doing the exact same job in the same city might get paid totally different amounts, and there was no connection between pay rates and performance. Often, no one asked participants if they liked their provider.
In 2016, after a tsunami of advocacy from many organisations, California agreed to fund a study aimed at identifying fixes for the broken system. The study, done in 2019, established what fair pay should look like. The fair pay proposal has been implemented gradually from 2022 until January 2025, but only at 90% — the remaining 10% was tied to quality measures to ensure that the services provided made participants’ lives better, but only if the provider was not already receiving the higher rate.
The quality improvement bonus measures outcomes such as:
Is the quality actually improving?
The higher rate must go to increasing wages for the worker, not to administrative costs.
January 1, 2025, was the target date for full rate model implementation. The trailer bill language for 2026 contains two concrete alterations but does not change the rate structure itself:
The rulemaking deadline is extended from June 30, 2028 to December 31, 2030. That means the department can keep running the program through written directives and informal instructions for longer before having to go through the full formal rulemaking process.
Contracting exemptions are extended. Procurement contracts were exempt from normal state purchasing rules "operative through December 31, 2030." This exemption language is extended to cover Section 4519.11 and the biennial rate model review process going forward.
This proposal will give DDS more runway to operate informally before locking everything into permanent regulations, which gives DDS more flexibility.
What parents need to know: Families and advocates should keep watching for how quality measures get defined in practice rather than waiting for formal rulemaking to nail things down, in both traditional and SDP services. Regional Center coordinators may be looking for positive quality indicators in order to ensure bonus payments and fair pay are made.
A major state technology project — the Life Outcomes Improvement System (LOIS) — is already underway. Right now, California's 21 Regional Centers each run their own case management and financial information technology systems. Some use SANDIS, some use Virtual Chart, SmartChart, KEA, Atlas, Atticus, or other platforms. This means the data infrastructure behind Regional Center services is fragmented — different systems, different data formats, inconsistent reporting, and significant cost in maintaining parallel systems across the state. LOIS is the state's effort to replace all of that with a single unified platform.
The proposed trailer bill language gives LOIS a legal foundation and sets the rules for the transition period. Starting July 1, 2026, Regional Centers must notify DDS of any plans to connect third-party applications to their data, cannot migrate their existing systems to any new platform other than LOIS without written state approval, and must prioritize data cleanup to prepare for the switch. Once LOIS is ready, Regional Centers must shut down all other systems and move fully to LOIS.
LOIS is designed so that individuals, families, and service providers can access and update their own information directly. That's a meaningful shift — currently, getting information out of RC case management systems is often opaque and cumbersome for families. A unified system also means your child's records should be consistent regardless of which Regional Center serves you, which matters enormously for families who move between catchment areas.
The more important long-term implication is data. A single statewide system means DDS will have real-time, consistent data on services, spending, and outcomes across all 21 Regional Centers — something that doesn't exist today. That has significant implications for oversight, for identifying disparate outcomes by race and ethnicity, and for policymaking. Advocates and legislators will have access to information that has historically been difficult to compile or compare.
What parents should know: Data is valuable and, once collected, can be misused. Families and advocates should watch the implementation closely, particularly around data privacy protections and what access rights individuals and families will actually have to their own records in the new system. LOIS is infrastructure; it doesn't change who is eligible for services or what services are available. But infrastructure shapes experience, and a well-implemented unified system could meaningfully improve consistency, transparency, and family access to information across the entire Regional Center network.
The trailer bill language proposes overhauling the Section 4731 complaint process for Regional Center clients to better align with the federal HCBS final rule for Medicaid-funded services. The new process would route grievances through DDS first, then to Regional Centers for local resolution. The budget proposes $2.4 million to DDS to enforce the ruling.
While the proposal will mainly impact adults, children with IDD who receive Regional Center-funded services — such as behavioral supports, respite care, day programs, or supported living — in community settings are covered by the HCBS Settings Rule if those services are funded by Medicaid. If those settings don’t meet the “home and community-based” standards (integrated, non-institutional, with autonomy and rights protections), families can file a complaint.
Currently, if a Regional Center client or their family believes a right was violated — a service was withheld, denied, or mishandled — they file a complaint directly with the Regional Center director, who has 20 working days to respond. If unsatisfied, the family escalates to the state, which has 45 days to issue a decision. This system has existed for decades.
This bill retires that process for any grievance filed on or after July 1, 2026, and replaces it with a new system under a brand-new Chapter 16 of the Welfare and Institutions Code.
What parents need to know: This grievance process is for rights violations and HCBS setting compliance issues — things like your child being denied rights under the Welfare Code WIC §4502-4503, or a provider operating in a setting that doesn't meet federal community-based requirements. It does NOT replace the fair hearing process for IPP disputes and disagreements over what services go in the plan. Those still go through the existing appeals procedure.
The most important shift is where you start. Under the old system, you went directly to the Regional Center. Under the new system, you go to the state first — the Department of Developmental Services receives your grievance and then routes it. This creates a paper trail at the state level from day one, which is a meaningful structural change.
Several new family protections are embedded in the bill:
New public dashboard
DDS will be required to publicly post annual data on grievance outcomes on a new public dashboard, including how many were filed, how long RCs took to respond, how many families requested state review, and what percentage were resolved in favor of the family vs. the RC. DDS has to review a sample of resolution plans annually, look for systemic problems at specific RCs, and fix them.
However, the bill allows DDS to move through written directives rather than full rulemaking, which is faster but also less public. Disability Rights California raises significant concerns that, as drafted, the proposal lacks teeth; it doesn’t clearly require meaningful remedies, make-whole relief when harm occurs, or strong DDS enforcement when Regional Centers fail to resolve complaints adequately.
DOR funds services to help individuals with disabilities find long-term employment, often termed vocational rehab. DOR and Regional Centers operate in parallel. An adult with a developmental disability often has to navigate both systems separately, with separate vendorization, separate funding streams, and handoffs between agencies that create gaps in service.
This trailer bill language requires DDS and DOR to develop a formal interagency agreement by August 2027, and then build an integrated employment services system by March 2029. The goals are explicit: uninterrupted services, fewer handoffs, and faster access to competitive integrated employment. The proposal is to create a “no wrong door” model for people with IDD seeking employment. Disability Rights California strongly supports this.
For a young adult transitioning out of school and into employment services, the current experience can look like this: Regional Center refers to DOR, DOR opens a case, there's a waiting period, funding questions arise, and the person falls through a gap or loses momentum. This bill is a direct attempt to fix that by requiring a unified path — one vendorization process for providers, clear funding obligations between the two agencies, and services that feel seamless regardless of which agency is technically paying.
What families need to know: The timeline is long — the full integrated system isn't due until 2029 — but the proposed law requires DDS to post public progress reports every six months starting December 2026, which creates some accountability.
The same trailer bill language proposes an accreditation change that will impact job coaches and supported employment coaches. Right now, work activity programs and supported employment programs that serve Regional Center clients are required to be accredited by the Commission on Accreditation of Rehabilitation Facilities (CARF), a national independent standards body. This bill tasks DDS with creating state-developed service standards in consultation with Regional Centers, providers, and other stakeholders by September 1, 2027.
What families need to know: CARF compliance has been a barrier to vendorization for some programs, particularly smaller or newer ones, but their accreditation program is a national benchmark. Removing CARF as a requirement could lower the floor for what programs have to demonstrate. Whether the new DDS standards end up being stronger, weaker, or equivalent to CARF will depend entirely on what the department develops — and families and advocates will have an opportunity to weigh in during that stakeholder process.
IHSS costs have been rising dramatically. The state is actively seeking to get the costs under control, although it is evident that IHSS is far cheaper than institutionalization. HR 1 removed some individuals from Medi-Cal and, therefore, from IHSS, but the changes aren’t all about federal funding. The state has seen a huge increase in IHSS costs over several years, and they are worried it’s going to keep going up.
Source: LAO
The Legislative Analyst’s Office (LAO) made a report showing three main drivers of the increased costs:
Overall, the LAO calculated that roughly 50 percent of the growth is due to caseload growth, 40 percent is due to cost per hour growth, and 10 percent is due to hours per case growth.
Source: LAO
Exacerbating the huge increase was a 2019 agreement between the state and the counties that administer IHSS: as the federal government was reducing costs, the state would provide the increased costs. However, the cost is not necessarily from federal cuts, and the balance between state and county is causing friction.
For this reason, the state proposal to lower the cost of IHSS falls principally on restoring the county’s responsibility to pay for IHSS and, therefore, to fund increased costs. The state is relying on the counties that make the assessments and determinations for IHSS to be incentivized to deny hours to families, thereby reducing costs or at least preventing them from accelerating.
The proposal also eliminates the Back Up Provider program that may affect some families.
What parents need to know: County IHSS offices could be looking for ways to deny eligible families. Make sure you prep for your assessment so that you can accurately convey your child's support needs.
Major changes are underway in the governance of public education, focusing on the role of the State Superintendent of Public Instruction. Over many decades, we have seen initiatives from the Governor or the State Board of Education with weak implementation from the CDE. The proposal seeks to align and coordinate these two centers of policymaking for more effective reform.
Prop 98, passed in 1988, requires the state government to allocate a certain percentage of its revenue each year to education spending based on a complex formula. The governor is proposing to withhold some of this money until another year. A large coalition of education advocacy organizations, including California Association of School Administrators (ACSA), California School Boards Association (CSBA), California Teachers Association (CTA), California Federation of Teachers (CFT), and California State PTA, are against this proposal, saying that the schools need the money now.
The state of the economy is a big unknown. According to the LAO, “Compared with the June 2025 enacted budget, the Governor’s budget estimates the guarantee is up $3.9 billion (3.2 percent) in 2024‑25, $6.9 billion (6 percent) in 2025‑26, and $10.9 billion (9.5 percent) in 2026‑27. These estimates depend on revenue projections that do not account for the current elevated stock market risks. A major downturn could reduce revenues by tens of billions of dollars—reducing the guarantee by about 40 cents for each $1 of lower revenue.” The state has to “settle up” if it gives schools too little but does not get the money back if it gives them too much.
What parents need to know: Many schools are experiencing funding cuts because their main funding is based on kids attending, so falls in enrollment and attendance cost a lot of money. The schools say they need this additional funding. Since roughly 60% of the money to pay for special education comes from the school district’s general fund, some schools are looking to cut the cost of special education just because money is so tight.
The governor’s budget proposes an increase of $509 million in AB602 base rates. The trailer bill sets this at $999 per ADA. The funding stream, which was created by law AB602 in 1997, does not come close to meeting the actual cost of special education; typically, it has met around 30-40% of the cost. Federal funding provides around 10%, while typically 50-60% is taken from local funding that is made up of local property taxes and state funding based on the LCFF formula. Notably, special education funding in California is allocated based on ADA without reference to the number or type of IEPs in the district. This additional funding will allow for full equalization of special education rates across the state, meaning that all LEAs will now receive the same rate per pupil for state special education funding.
When AB602 was implemented in 1998, each SELPA received money based on the number of special education classrooms or programs they had. To ease the new system in, the law set out different rates for each SELPA, which would gradually increase over time until they were equal. But for more than a decade, there were no increases. In 2020, a West Ed study found base rate differences ranging from $550 to $980.
Governor Newsom started to increase the base rate each year so that in 2025-2026, all SELPAs received $918 per ADA (except one that received $999). This $509 million will finally raise all SELPAs to the same equal funding level. For this to happen, we know that each SELPA (except one) will receive an additional $81 per student who shows up to school on an average day. Since this money can only be spent on students with IEPs, and that is now around 15% of all students in California, we can expect approximately $540 per IEP student. Of course, districts and charter schools with a lower identification rate will receive more per student with an IEP.
To put this into perspective, the average expenditure in California per public school student in the 2024-25 school year was $21,214 per ADA. Of that, $2,981 per ADA was spent on special education instruction and far more on administration, so an increase of $81 is useful but will most likely just reduce the amount the district has to take out of the general fund to make a difference.
There is also a bill being proposed, AB 2526 (Muratsuchi), that will apply additional funding to students who are eligible for the California Alternative Assessment. That might well be a useful way of giving districts a small incentive to pay attention to students with extensive support needs, but given that the state is required by federal law to limit the alternative assessment to 1% of students, there are concerns that this could lead to overuse of this assessment.
The $15 million already appropriated to the Riverside County and El Dorado County Offices of Education for their Supporting Innovative Practices project — which provides tiered technical assistance and grants to LEAs to increase inclusion of students with disabilities in general education — is extended from June 30, 2026 to June 30, 2027. There is also a bill, AB2468 (Patel), proposing changes to SIP, locating them within the California Collaborative for Educational Excellence, and therefore under the State Board of Education (SBE) rather than in the California Department of Education.
Many children with disabilities qualify for IDEA under Part C for infants and toddlers. When a child turns 3 years old, there is a transition from early intervention services (Part C, birth to age 3, mostly administered through Regional Centers) to preschool special education services (Part B, administered through school districts). Coordination between Regional Centers and school districts is inconsistent, and families frequently fall through the gap as Regional Center services end, the school district isn't ready, and the child loses services right at a developmentally critical moment.
This transition is one of the most stressful and confusing for families of young children to face, and this trailer bill language is a direct attempt to make it less chaotic. It requires a formal interagency agreement between DDS and the Department of Education specifically focused on the Part C to Part B transition.
Regional Centers and local school districts (LEAs) are now each required to designate a named point of contact responsible for coordinating that transition. Regional Centers are given responsibility for assessing toddlers aging out of Part C who may be eligible for a California state preschool program and make a referral.
The bill also requires that families receive specific, standardized information:
DDS is authorized to issue directives to both Regional Centers and LEAs to implement these provisions while regulations are being developed, with a deadline of June 30, 2029 for final regulations.
What parents need to know: If your child is under age 3 and receiving Regional Center early intervention services, you should be provided this information and dedicated points of contact.
The new preschool referral requirement from Regional Centers is particularly significant; it creates a pathway to general education preschool settings that previously depended entirely on whether an individual service coordinator happened to raise it. It's not a new entitlement, and it doesn't change who is eligible for what.
There are some worrying cuts in these proposals that will impact families. Overall, the throughline across the trailer bill language is a push toward greater state-level coordination, accountability, and equity infrastructure — moving California away from fragmented, locally variable systems toward more standardized, centrally monitored delivery of both educational and developmental services. This is good news, so long as families work together to guide that state-level process.
What’s missing? There isn’t any additional money for schools to deal with the chronic shortage of special education teachers and paraprofessionals, and there is no proposal to increase funding based on the number of students with disabilities.
Sources:
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