Overview

• The plan withdraws about $7 billion from the rainy-day fund and $6.5 billion from other cash reserves to plug a projected $12 billion deficit.
• Enrollment of undocumented adults in Medi-Cal will be frozen starting January 2026, with a $30 monthly premium set to begin in July 2027.
• Public transit agencies and the University of California and California State University systems avoid cuts but will receive some deferred payments and zero-interest loans.
• Lawmakers preserved $620 million for affordable housing grants, $500 million for homelessness services and added $100 million for implementing Proposition 36.
• Critics say reliance on accounting maneuvers and reserve raids conceals a structural deficit that could exceed $20 billion annually in coming years.