California's Budget Overview: Transforming Health Services Under Newsom

Over Governor Gavin Newsom's tenure, California has seen a significant boost in budget allocations for social programs, bringing transformative changes to the state's health and human services. Newsom’s final budget for the 2026-27 fiscal year amounts to $539.1 billion, a 36% increase from former Governor Jerry Brown's budget when adjusted for inflation. A substantial portion, $344.3 billion, is directed to the California Health and Human Services Agency (CHHS), focusing primarily on Medi-Cal, the Department of Social Services, and the Department of Developmental Services.

Medi-Cal, California's largest healthcare program, represents two-thirds of CHHS's annual expenditure. It provides medical services to low-income residents and those meeting specific eligibility requirements. Under Newsom, the Medi-Cal budget increased by 55% compared to Brown's era. Notably, Newsom prioritized state-funded Medi-Cal expansions, extending coverage to undocumented immigrants, a shift from his predecessor's reliance on federal funding sources like the Affordable Care Act.

The Department of Social Services represents 18% of CHHS spending, experiencing a 77% rise since Brown’s last budget. This uptick stems partly from transferring childcare duties from the Department of Education in 2021 and expanding the In-Home Supportive Services program to improve eligibility and provider wages. Meanwhile, funding for the Department of Developmental Services has surged by 117% since the Brown administration, propelled by legislative measures to enhance provider rates for individuals with developmental disabilities.