HOPE’s Response to the Final 2025–2026 California State Budget
This week, Governor Newsom signed the final 2025–2026 California state budget into law, closing a significant deficit while preserving key investments in education, workforce development, and support for working families. However, the budget also includes deeply concerning rollbacks to Medi-Cal coverage for undocumented Californians and delays critical food and financial assistance programs that disproportionately impact immigrant and low-income communities. HOPE recognizes the difficult fiscal environment while urging state leaders to continue centering equity and ensure future budgets restore and expand the safety net for the communities who need it most.
“At a time when California is facing tough financial decisions, we commend the State Legislature and Administration for preserving investments that support families across our state—especially in areas like childcare, workforce development, and college access. However, we cannot ignore the harmful rollbacks to immigrant health care and delays in vital food assistance. Access to quality health care and basic necessities is not only essential to individual well-being—it’s foundational to a strong workforce and a growing economy. These cuts risk setting back the progress California has made in building a more prosperous future for all.” said Helen Torres, CEO of Hispanas Organized for Political Equality (HOPE).
Below is a summary of the final budget’s impact on Latinas’ access to health care, economic opportunity, and educational equity, HOPE’s core areas of advocacy.
Health Equity & Access
Medi-Cal Cuts for Undocumented Adults
Despite California’s leadership in expanding health access, the final budget includes harmful rollbacks:
Enrollment Freeze: Beginning January 1, 2026, Medi-Cal enrollment for undocumented adults ages 19 and older will be frozen, with a six-month grace period for re-enrollment. Children will not age out.
Premium Requirement: A $30 monthly premium will be imposed on undocumented adults to access care, with implementation delayed until July 1, 2027.
Requiring a $30 monthly premium for healthcare exacerbates the existing financial burdens that our communities face when accessing healthcare. It will lead to an increase in health disparities for communities that rely on Medi-Cal as a lifeline.
Benefit Reductions: Dental and long-term care benefits will be eliminated for undocumented adults starting July 1, 2027.
Asset Test Reinstated: The final budget reverses a prior policy by reinstating a $130,000 Medi-Cal asset limit, which undermines access for seniors and people with disabilities.
In 2024, California completely eliminated asset limits for Medi-Cal eligibility. This means that Medi-Cal, which is the state-based Medicaid program, no longer considers assets (like bank accounts or property) when determining who is eligible for benefits. This budget reinstates the asset limit but sets it at $130,000 instead of the Governor’s proposed $2,000 level.
California has led with equity to ensure all Californians have access to health services. We urge our leaders to ensure the continuity of care and protection for immigrant communities that are vital to our workforce and economy.
Investments in Reproductive Health
The final budget rejects the Governor’s May revise proposal to cancel nearly $60 million of unspent public health funding: This protects funding for the California Reducing Disparities Project, support for LGBTQ+ Foster Youth, LBTQ Women’s Health Equity grants, Reproductive Health Justice grants, STD/HepC prevention programs, and public health workforce programs.
HOPE supports continued reproductive health access, including investment in a culturally competent birthing care workforce that reflects the needs of our communities.
Economic Empowerment:
Child Care and Family Supports Protected
Child Care Cost-of-Living Adjustment: The final budget protects childcare programs that serve as a lifeline for working families. This includes $70 million for a rate increase to all subsidized childcare and preschool providers.
Diaper and Wipes Distribution Program: Provides $7.4 million for the diaper bank network to distribute diapers and wipes to low-income families.
Delays the California Food Assistance Program (CFAP) Expansion
The final budget delays the expansion of CFAP for undocumented adults 55 and older, subjecting it to appropriation by the Legislature.
Support for Immigrant Families and Entrepreneurs
Immigration legal services: Provides $10 million for immigration legal services under the One California program at the Department of Social Services (CDSS), in addition to the $75 million ongoing for One California immigration legal services and the $10 million for One California immigration legal services provided in special session.
The SEED initiative is included in the final budget, resulting in increased investments for immigrant entrepreneurs. The final budget allocates $7.5 million in one-time funding from the 2025-26 General Fund for the SEED Initiative.
During our day of advocacy, HOPE was proud to partner with Inclusive Action for the City and other advocacy organizations to elevate the need for reinstatement of funding for the Social Entrepreneurs for Economic Development (SEED) Initiative, which provides microgrants, entrepreneurship training, and coaching to immigrant entrepreneurs.
Preserves statewide Coordination for Career Education
California Education Interagency Council: Provides $1.5 million to fund an education and workforce interagency entity to improve planning and coordination in higher education and workforce development, aligned with the Governor’s Master Plan for Career Education.
These regional coordination efforts are crucial to ensuring equitable workforce development across all sectors. The California Interagency Council also has the potential to bring together agencies and stakeholders to advance an aligned, coordinated plan to better bridge education to career opportunities for students.
HOPE looks forward to working with the Legislature and Administration to maintain robust investments that support regional, coordinated strategies for career readiness and economic mobility.
Final budget protects In-Home Supportive Services (IHSS) benefits and Support for Caregivers
The final budget protects IHSS access for undocumented adults.
It rejects proposed caps on overtime and travel hours, preserving care quality and provider capacity.
The IHSS program provides domestic and related services such as housework, meal preparation, and personal care services to eligible low-income individuals with disabilities, including children and adults, as well as low-income individuals who are ages 65 and over. These services are provided to assist individuals to remain safely in their homes and prevent more costly institutionalization. We commend our state leaders for protecting access to these vital programs.
Education Equity & Access
Maintaining Access to Education Investments in a Challenging Budget Year
HOPE commends our state leaders for preserving critical education funding in the final budget, reinforcing California’s commitment to equity and student success. These sustained investments protect resources for the Local Control Funding Formula (LCFF), special education, Transitional Kindergarten (TK), universal school meals, and literacy initiatives advancing HOPE’s vision for educational equity across the state. The final budget includes:
Universal TK and Literacy Gains
Universal TK: $2.1 billion in ongoing support will facilitate full implementation by 2025–26, expanding access for 51,000 additional children.
Staffing Ratio Improvements: $1.2 billion improves adult-to-student ratios in TK classrooms.
Literacy Support:
$200 million one-time Prop 98 is dedicated to evidence-based professional learning for elementary educators.
$215 million one-time for the Literacy Coaches and Reading Specialists Grant Program; and
$40 million in one-time funds to cover essential costs, including purchasing screening materials and training educators to conduct literacy screenings for students in kindergarten through second grade, as the requirement starts in the 2025-26 school year.
Career Technical Education (CTE)
$150 million reserved for pending CTE legislation; if unpassed, funds go to the CTE Incentive Grant Program.
HOPE supports these equity-driven efforts that close early opportunity gaps for English learners and students of color.
Strengthening the Educator Pipeline:
The final budget builds on prior investments to diversify and strengthen California’s teacher workforce, particularly for underrepresented and first-generation candidates. This includes:
$300 million one-time funding for the Student Teacher Stipend Program;
$70 million one-time for the Teacher Residency Grant Program
$30 million one-time to mathematics professional learning; and
$30 million one-time to the National Board for Professional Teaching Standards Certification Incentive Program, with $3 million dedicated to cover fees for first-time candidates.
Additionally, the Budget Act of 2025-26 consolidates educator-related initiatives to be administered by the Commission on Teacher Credentialing, including the National Board Certification Incentive Grants. It establishes a common portal for a universal application to various educator initiatives.
HOPE supports these measures as essential to recruiting and retaining a culturally competent and representative teacher workforce.
Protecting Student Services and Advancing Dual Enrollment:
The final budget includes a Student Support and Professional Development Block Grant, providing a $1.7 billion investment in local efforts to:
Expand dual enrollment and career pathways aligned with the Master Plan for Career Education.
Provide literacy and math professional development.
Support teacher recruitment and retention.
HOPE strongly supports the continued focus on dual enrollment, a proven strategy for improving college access and persistence among Latina students.
Investing in Student Basic Needs:
The final budget also includes:
Universal Meals: one-time $160 million Proposition 98 funds for the Universal School Meals Implementation Support Grant, which will support local food procurement, kitchen infrastructure, nutrition staff, and recruitment and retention.
SUN Bucks Program: Appropriates $43.8 million in ongoing Proposition 98 General Fund and Federal Funds for the local implementation of the SUN Bucks program.
Multilingual Learner Supports: $7.5 million in one-time funding to mitigate TK-related reductions, and $2 million ongoing to sustain Regional English Learner Lead Agencies.
College Affordability and Financial Aid Access
We support the final budget’s increases to financial aid programs that reduce the cost burden for low-income and first-generation students. This includes:
Emergency Financial Aid: Includes $20 million one-time Proposition 98 to Community colleges for flexible emergency financial aid to students. Also includes $5.1 million one-time Proposition 98 to CCC for Financial Aid Community Support.
Student Support Block Grant (CCC): $60 million one-time
Dream Resource Liaisons: $15 million one-time
CTE Grants and Career Passports: Includes $5 million one-time Proposition 98 to CCC for career technical education grants in response to the L.A. wildfires. Includes $25 million one-time Proposition 98 for the Career Passports Initiative at community colleges.
Cal Grant Adjustments: $94.7 million one-time and $228.7 million ongoing General Fund increases to meet higher-than-expected student demand.
Middle Class Scholarship: $77 million one-time increase to support additional caseload.
HOPE urges continued progress on Cal Grant Reform to simplify and expand access for low-income and first-generation students.
What is next?
California’s fiscal reality has shifted sharply since the January budget proposal, due in part to federal policy impacts such as tariffs and potential Medicaid cuts. While this final budget reflects difficult rollbacks for our communities, HOPE remains committed to working with state leaders to ensure future budgets restore equity-driven investments, especially for immigrant and low-income communities.