Good news! The disability community made their voices heard, and your representatives in Sacramento listened! On June 9, the Legislature published their version of the state budget for 2025-26. The lawmakers rejected many troublesome cuts, saying that they did not want to balance the budget on the backs of California’s most vulnerable residents.
Unfortunately, the $22.5 million in cuts (for 2025-26 and $45.5 million in ongoing cuts) to the Self-Determination Program budget is still there, not in the Budget Bill SB101 but in a budget trailer bill. The “guardrails” proposed are preventing families from moving funds from one spending category to another, reducing the requirement for the Regional Center to consider unmet need in the initial budget, and requiring SDP services to meet the same cost control conditions that all traditional Regional Center services have to meet.
What happens next?
The Standing Committee on Budget and Fiscal Review is holding hearings this week. The Legislature must vote on the budget by June 15 (otherwise their pay is docked!). The governor can still veto any line item before signing the bill.
After the main budget bill is passed, the legislature will work on passing the trailer bill where the language for the SDP guardrails will be finalized. After the bill is passed, new regulations will be issued by DDS.
Proposed cuts and changes
In January, Governor of California Gavin Newsom issued a proposal for next year’s budget which must be finalized in legislation by July 1st. On May 14, 2025, Governor Newsom released a May Revision to his proposed 2025-26 California state budget from January based on projections that include information from 2024 tax returns.
At the start of the budget process, it had seemed like California could proceed with a budget closely tied to former years. However, due to federal policy such as the tariffs impacting our foreign trade and our wealthiest residents’ market income, the governor anticipates a sharp decline in California’s state income. Since the state government must produce a balanced budget, the Governor is proposing nearly $12 billion in budget actions to close an estimated 2025-26 deficit ($7.5 billion) and build up the state's discretionary reserve ($4.5 billion).
Since Prop 98 provides strong guarantees to maintain levels of education funding, most of these cuts fall on the health and human services spending.
Health and Human Services (HHS): the May Revise reports that spending in HHS programs have significantly increased, from $161 billion ($35 billion from the General Fund) in 2017 to an estimated $283.9 billion ($76.8 billion from the General Fund) in 2024-25. This increase is primarily driven by Medi-Cal, Developmental Services, and In-Home Supportive Services (IHSS), and is projected to further increase. The state must produce a balanced budget, so HHS for 2025-26 are limited to $302.4 billion ($85.6 billion General Fund).
This means the amount that HHS will spend is actually increasing, but not by as much as they need to keep doing what they are doing.
Medi-Cal is a public health care coverage program administered by the Department of Health Care Services (DHCS). It provides health care coverage at no- or low-cost for low-income individuals, individuals with disabilities, and other special populations. The proposed budget includes $179 billion ($37.4 billion General Fund) in 2024-25 and $194.5 billion ($44.6 billion General Fund) in 2025-26. Medi-Cal is projected to cover approximately 15 million Californians in 2024-25 and 14.8 million in 2025-26 — more than one-third of the state’s population.
Most of the changes proposed by the May Revise relate to Californian’s expansion of Medi-Cal to immigrants whose status does not qualify for federal matching. These are now termed individuals with unsatisfactory immigration Status (UIS). Some are undocumented and some have temporary status or are refugees. The proposals are to freeze this expansion permanently (no new subscribers) and to offer that those already in the system can pay a premium of $100 a month to keep it. Even with the premium, it won’t cover certain benefits like longterm care and dental. This only applies to adults over 19.
How it affects California families
Three proposals will deeply affect the developmental disability community.
Cuts to the budgeted amount for the Self-Determination Program. The Governor proposed a cut of $22.5 million for 2025-26, and $45.5 million in ongoing cuts to the Self-Determination Program. The Department of Developmental Services (DDS) is tasked with creating new “guardrails” that protect the sustainability of the Self-Determination Program. They have not yet defined what those “guardrails” are and will be seeking stakeholder input.
The reinstatement of the Medi-Cal asset limit for adults. The Medi-Cal budget will be reduced by reintroducing the asset limit for seniors and disabled adults of $2000 for an individual or $3000 for a couple, effective no sooner than Jan 1, 2026. This means any adult with more than $2000 in savings would not be eligible for MediCal. It does not affect many adults because the SSI limit is similar. It will affect advocacy efforts to secure marriage equity for adults with developmental disabilities because couples with $2000 each cannot marry without losing their health insurance. You can avoid this penalty by keeping your savings in an Able Account.
A cap on overtime hours for IHHS providers to 50 hours a week. Currently many providers, particularly families that get Protective Supervision, claim overtime hours when they exceed 40 hours per week. Currently, this is limited to 66 hours a week (i.e. 22 hours overtime) for a provider with two clients and 70 hours a week (i.e. 30 hours overtime) for a provider with only one client. The proposal is to cap it at 50 (i.e. 10 hours overtime). DDS argues that they are not cutting services as these hours can be provided by other providers. However, their own report in 2021 identified a chronic shortage of providers and that has not changed over four years. Two parent families can adjust by sharing the hours although their income will be impacted by the change from overtime to regular pay. However, single parent families are going to be most impacted by this proposal.
Status
Will be voted on by June 10, 2025 and come into effect February 2026.
What families can do
This budget proposal is just that: a proposal. Speak out to your legislators urgently as the budget must pass through the legislature by June 10. Once passed, the changes will likely come into effect on January 1st 2026.
Contact your legislators to tell them your story. Call and email the senate, state assembly committee, and your representatives to make your voice heard! We’ve prepared a template letter here that you can share.
While there are no cuts to Medicaid planned for 2025, the One Big Beautiful Bill (OBB), which passed the House of Representatives on May 22, 2025, contains substantial cuts to Medicaid. See more about the planned cuts here.
How it affects California families
Many state and county programs — such as Medi-Cal, Regional Center, and IHSS in California — are partially funded by Medicaid reimbursement, some as much as 70%. Most Regional Center funding is reimbursed at least to 50%. If this support is cut, it is unlikely that California will be able to sustain current levels of funding for Regional Center and IHSS.
For California, the Governor’s office estimates that the bill will eliminate coverage for up to 3.4 million Californians, largely among those covered under the Affordable Care Act (ACA) expansion and will cut at least $22 billion in federal Medicaid funding through burdensome requirements on low-income Californians.
California’s commitment to cover residents without satisfactory immigration status for non-emergency benefits will cost at least $4 billion each year in federal reimbursements. California will also lose billions of dollars in funding through the restrictions on provider taxes. The bill could also shut down nonprofit providers like Planned Parenthood by cutting them off from Medicaid funding — unless California can find alternative state funding.
California Governor Newsom said on May 14, 2025, that the penalty for covering Medi-Cal for undocumented residents will cost California $5 billion, and he proposes that the state reverse their course on this. Although this will help California meet the costs for other residents, there are still major cuts coming from the limits on provider taxes that have to be made up.
What families can do
The budget proposals in the House still need to be agreed by 51% of the Senate. There are more meetings before this is a done deal, so please write to your Senators. The administration is aiming for the President to sign the final bill on July 4th.
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