California’s 2026 Proposed Budget: The Good and the Bad for People with Disabilities and How You Can Help!

California’s lawmakers must agree to a state budget by the end of June. This $350 billion package includes funding for disability services and other policies that could have far-reaching impacts on Californians with disabilities. 

Governor Gavin Newsom and the California Legislature have each put forth competing proposals. The next step in the budget process is for both parties to negotiate what will end up in the final state budget. These proposals include both good news and bad news for people who depend on critical disability programs. 

Read on to understand the key proposals and how you can raise your voice.

The good news: HCBS budgets were preserved

Both the Governor’s and the Legislature’s budget proposals preserved funding for the state agencies that oversee and administer Home and Community-Based Services (HCBS), which are essential for many people with disabilities. 

The Department of Developmental Services (DDS), the Department of Rehabilitation (DOR), and the Department of Aging (CDA) all avoided budget cuts. Together, these agencies fund important ESSC programs, including Adult Day Services, Living Options, and WorkFirst Employment Services.

Why is this significant? 

California was expected to face major budget cuts this year, largely due to reductions in Medi-Cal funding caused by federal legislation passed last year. In response, ESSC made protecting HCBS a key advocacy priority this year. As part of that effort, Easterseals advocates traveled to Sacramento in April to meet with 35 state legislators and share lived experiences that highlight the importance of HCBS.

However, it is important to know: The budget is not yet final, so while this is undoubtedly good news, HCBS budgets are not yet assured. 

Read on to understand what happens next—and how you can help protect this funding.

The bad news: Medi-Cal asset limits may be restored

The Governor and the Legislature have put forward competing proposals to reinstitute asset limits for individuals receiving Medi-Cal services.

Governor’s Proposal 

• Starting January 2027, seniors and disabled adults would not be able to receive Medi-Cal services if they had “qualifying assets” of more than: 
  • $2,000 per individual 
  • $3,000 per couple 
• Each additional household member would raise the asset limit by only $150. 
• A home and one car would not be counted against asset limits. 

Legislature’s Proposal 

• Starting July 2027, seniors and disabled adults would not be able to receive Medi-Cal services if they had “qualifying assets” of more than: 
  • $21,000 per individual 
  • $31,000 per couple 

• A home and one car would not be counted against asset limits. 

  

While both of these proposals would be unwelcome and could create major restrictions for people with disabilities and older adults, the Governor’s proposals could seriously harm Californians with disabilities and older adults.

The current Medi-Cal asset limit is $130,000, with the limit increasing $65,000 for each additional household member. Therefore, if enacted, the Governor’s proposal would be an especially massive decrease—matching the limits eliminated by the Legislature in 2021. 

Why are Medi-Cal asset limits such a bad idea?

Low asset limits create structural barriers to equality and inclusion for people with disabilities. Among the key reasons:

• A barrier to employment, savings, and education: To keep benefits that often cover only basic needs, people with disabilities can face significant financial and personal barriers. These barriers can discourage employment, career growth, saving money, and pursuing education.
• The Governor’s proposal creates a “relationship penalty”: By setting the asset limit at $2,000 for individuals and only $3,000 for couples, the proposal unfairly penalizes Californians in relationships. For many people, keeping benefits could mean facing financial pressure not to marry or even live with a partner. (It is important to note that the Legislature’s proposal also creates a relationship penalty, just one that is not as severe.)

Forcing people to choose between keeping essential benefits and building a secure, independent future reinforces a harmful cycle of marginalization for the disability community. Asset limits make it harder to save money, plan ahead, and make basic life decisions with dignity and stability. Federal experience with Supplemental Security Income (SSI) has already shown how damaging these policies can be. California should not repeat that mistake.

What happens next?

The budget proposals are not final. Over the coming weeks, the State Legislature will negotiate with the Governor over which items to keep and which items to reject. By June 30th, the Governor and Legislature must agree on the budget. 

This means two things:

1. No budget item is safe! Until the final budget is signed, additional cuts may occur. They are unlikely, but it is possible.
2. Advocacy matters! ESSC Government Relations is working with our state Assemblymembers and Senators to let them know of the damaging impacts of the asset limit proposal.

YOUR VOICE MATTERS! 

Your representatives do want to hear from you. You can exercise your voice by:

• Reaching out directly to your representatives and ask them to REJECT THE GOVERNOR’S ASSET LIMIT PROPOSAL. See below for how!
• Get in touch with ESSC Government Relations and let us know how reduced asset limits will impact you, the individuals you serve, or others in your community. We will raise your stories to our legislators. Email Barry Kurland at berry.kurland@essc.org. 

What Can You Do?

In addition to Easterseals’ advocacy efforts in Sacramento, we have also launched a grassroots letter-writing campaign to our state representatives, and we encourage everyone to join before the end of June 2026. 

Your voice truly matters! Lawmakers appreciate hearing directly from constituents, and the more constituents speak up, the more lawmakers will be forced to reckon with the damaging impacts of these proposals. 

Share your story.  A personal message can make a real difference.

1. Click the button below
2. Enter your address to find your State Senate and Assembly representatives
3. Visit their website to find their contact information
4. Ask them to protect Home and Community-Based Services (HCBS) and other disability supports in the state budget

Writing Tips

• Keep your message short, honest, and respectful.
• Explain who you are, what services you or your family rely on, and what the cuts would mean to you
• Be specific about the impact. For example: losing support to live at home, reduced access to care, job loss, loss of respite, or increased stress on family caregivers.

• Ask clearly for action: Please protect funding for disability services and reject cuts that would harm Californians with disabilities, seniors, veterans, and families.

  Sample opening: I am a California resident and I am asking you to protect Californians with disabilities and seniors by rejecting the Governor’s proposal to reinstate Medi-Cal asset test limits of $2,000 per individual and $3,000 per couple. 

  Disability services help me/my family member by  _________________________________

      Asset limits would harm me/my family member by  ________________________________