On May 14, Governor Gavin Newsom proposed a state budget—known as the “May Revise”—that could have far-reaching impacts on Californians with disabilities. The $349.4 billion budget includes both good news and bad news for people who depend on critical disability programs.
The good news: HCBS budgets were preserved
The Governor’s budget 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.
Here’s what happens next—and how you can help protect this funding.
The bad news: Medi-Cal asset limits may be restored
One of the Governor’s proposals could seriously harm Californians with disabilities and older adults. If approved, it would sharply reduce the amount of assets a person could keep and still qualify for Medi-Cal.
- 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.
The current Medi-Cal asset limit is $130,000, with the limit increasing $65,000 for each additional household member. Therefore, if enacted, this would be a 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.
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 May revised budget proposal is not final. Over the coming weeks, the State Legislature will review the proposal and will negotiate with the Governor over which items to keep and which items to reject. By June 15th, the Governor and Legislature must agree on the budget—although details will not be finalized until a later date.
This means two things:
- No budget item is safe! Until the final budget is signed, additional cuts may occur. They are unlikely, but it is possible.
- 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.
