California’s 2026 Budget Breakdown: What You Need to Know About the $298 Billion Plan

A Closer Look at How Sacramento Plans to Spend Your Tax Dollars

California lawmakers have unveiled a $298 billion budget proposal for 2026, marking a modest increase from last year’s spending plan. With the Golden State facing a $28 billion deficit, the new budget aims to balance fiscal responsibility with critical investments in education, healthcare, and infrastructure.

Key Highlights of the 2026 Budget

• Education Takes Priority: K-12 schools and community colleges will receive $128 billion, ensuring continued funding for free school meals and expanded afterschool programs.
• Healthcare Expansion: Medi-Cal coverage will extend to undocumented residents aged 26-49, costing $2.6 billion annually.
• Climate Resilience: A $7.3 billion commitment to wildfire prevention, drought response, and clean energy initiatives.
• Housing Crisis Response: $3.2 billion allocated for affordable housing and homeless services, though critics argue it’s not enough.

Controversial Cuts and Trade-Offs

To offset the deficit, lawmakers proposed:

1. Delaying $6 billion in climate funding originally set for 2025.
2. Reducing prison spending by $400 million through early releases and facility closures.
3. Scaling back middle-class tax credits to save $1.1 billion.

What’s Next?

The budget now heads to Governor Newsom’s desk, where negotiations could stretch into summer. With California’s economy at a crossroads, every dollar will face intense scrutiny.

What Do You Think?

• Should undocumented immigrants receive taxpayer-funded healthcare while the state faces a deficit?
• Is reducing prison spending a smart fiscal move or a public safety risk?
• Are California’s budget deficits a spending problem or a revenue problem?