Budget Spotlight - 04/23/2026

Subcommittee #1 (Education)

Pérez (D-Pasadena) Chair, Ochoa Bogh (R-Yucaipa), and Archuleta (D-Pico Rivera)

Special Education Funding Increase. The subcommittee discussed the Governor's proposals related to special education. In addition to a cost-of-living adjustment (COLA), the Governor's budget proposes to increase the special education base rate total funding by $509 million. Enrollment in special education has grown from about 10.4 percent of students in 2014-15 to 14.3 percent in 2024-25. According to the Legislative Analyst's Office (LAO), special education costs have increased faster than federal and state funding. This has caused districts to rely more heavily on local funds with a roughly 10 percent increase in the portion of local funds dedicated to special education over the past decade. Senate Republicans believe that if the state prioritizes its existing resources properly, high priorities like special education can receive all the resources needed for positive results. The proposed funding will be updated in the May Revision as more recent attendance and COLA data become available.

Key Topics to be Heard Next Week: Department of Education issues, including universal school meals, expanded learning opportunities program, community schools, and the statewide system of support.

Subcommittee #2 (Resources, Environmental Protection, and Energy)

Menjivar (D-San Fernando Valley) Chair, Grove (R-Bakersfield), and Weber Pierson (D-San Diego)

Child Care Costs Continue to Rise. The subcommittee discussed issues related to state-subsidized child care programs, which have grown at an astronomical rate under the Newsom Administration. Child care for CalWORKs parents is intended to help those parents obtain job training or employment, but under Governor Newsom, subsidized slots for those beyond CalWORKs have more than doubled, rising by nearly 114 percent. General Fund spending for child care has also grown more than 2.5 times, from just under $2 billion in 2019-20 to over $5 billion projected for 2026-27. Part of this growth is the result of the recent state action to allow a new union of child care providers to form and negotiate with the state, even though the providers are not state employees. Another concerning factor is the state's policy of paying child care providers even when no children are present. Antifraud measures in this benefit area may also be deficient. Despite the historic cost growth, the state's proposed transition to a single rate structure for child care and preschool would cost an additional $11 billion above current investments, for a total of nearly $19 billion. As years of state budget deficits exceeding $20 billion per year loom, the state must do a better job of targeting assistance to those who truly need it and ensuring taxpayer dollars are utilized wisely.

Key Topics to be Heard Next Week: The county behavioral health system and the Department of State Hospitals.

Subcommittee #4 (State Administration and General Government)

Hurtado (D-Bakersfield) Chair, Niello (R-Fair Oaks), Cabaldon (D-Yolo), Smallwood-Cuevas (D-Los Angeles)

Governor Ignores Legislative Direction for Broadband Project. Budget Subcommittee #4 met to review the state's implementation efforts on the Middle Mile Broadband Initiative, which must meet significant milestones in the coming years. Committee members expressed concerns that the Governor's handling of the Initiative does not align with legislative intent. At issue is the Department of Technology's (CDT's) recently adopted strategy for managing and operating the network, which includes contracting with an out-of-state, for-profit company to operate the system, even though the original legislation (Senate Bill 156, 2021) specified that the contractor should be a California nonprofit. Senator Roger Niello (R-Fair Oaks) pointed to what he described as a "glaring contrast between Legislative direction and what the Governor has done," warning that administrative interpretations of legislative intent risk sidelining the role of elected lawmakers. Senator Niello emphasized that such decisions may effectively circumvent the Legislature, raising broader questions about transparency and accountability. As the project moves forward, the Legislature will need to ensure stronger accountability and continued oversight of the Governor's actions to ensure the initiative remains consistent with its original goals of expanding access while maintaining fiscal responsibility.

Key Topics to be Heard Next Week: Various housing programs, as well as budget proposals from the state's Civil Rights Department.

Subcommittee #5 (Corrections, Public Safety, Judiciary, Labor, and Transportation)

Richardson (D-San Pedro) Chair, Seyarto (R-Murrieta), and Durazo (D-Los Angeles)

Unemployment Insurance Fraud. The subcommittee considered a request for $146 million to continue funding the Employment Development Department's (EDD's) modernization plan, EDDNext, which includes upgrading EDD's benefit systems, fraud systems, customer access, and processes. Fraudulent claims in the state's Unemployment Insurance (UI) program plagued EDD during the pandemic, when the inability to detect and stop invalid claims resulted in $30 billion or more in fraudulent benefit payments. Senator Kelly Seyarto (R-Murrieta) requested an update on EDD's progress in reducing fraud. In response, EDD stated that the criminal fraud has been eliminated from the program, but smaller instances of fraud continue to exist, such as applicants claiming they are not working when in fact they are. Senator Seyarto applauded EDD's progress but noted that any fraud is too much, while recognizing that zero fraud is likely unachievable. He encouraged EDD to continue mitigation efforts. The budget request was held open for a future vote.

Key Topics to be Heard Next Week: The agenda for next week only lists "Open Issues" at this time.

Related Topics

• Budget
• Affordability
• Cost of Living