Senate Budget Committee advances AB 101, 10-6, after debate over Medi‑Cal, reserves and homelessness funding

The California State Senate Budget Committee voted 10-6 to advance Assembly Bill 101, the Budget Act of 2025, after a hearing on June 11 in Room 1200 at 10210 Street that included extended debate on Medi‑Cal changes, reserves and homelessness funding.

Chair Scott Wiener opened discussion by saying, “We face some very hard choices in this budget,” and framed AB 101 as a two‑house agreement that the committee had vetted through subcommittee hearings. The package presented in committee includes approximately $324.7 billion in total spending, about $231.9 billion of which is general fund, and relies on roughly $12.3 billion in “solutions” and $13.2 billion in combined year‑end reserves, according to the materials read into the record.

Why it matters: AB 101 is the Legislature’s primary vehicle to set state spending and reserves for 2025–26. Committee members described it as an effort to protect core services while responding to revenue uncertainty tied to national and global economic conditions.

Key provisions and debate

- Education and higher education: Committee members repeatedly noted the package preserves K–12 funding under Proposition 98 and rejects a proposed 3% cut to the University of California and California State University systems. Several senators said the faces of budget constraints make even a 0% nominal cut a real cut because of inflation and rising costs.

- Medi‑Cal and coverage for immigrants: The legislature’s package narrows some of the governor’s May revision proposals but keeps major changes to the program in play. Legislative staff and Department of Finance witnesses said the expansion to individuals with unsatisfactory immigration status (UIS) contributed to cost pressures; Department of Finance staff said those costs were about $2.8 billion higher than the 2024 budget act. The package alters the administration’s proposals by raising the Medi‑Cal asset limit to the mid‑tier level used in 2003 ($130,000 for an individual, per the record), scaling back some premium and eligibility changes and delaying certain payment reductions. Committee discussion focused on balancing coverage commitments with fiscal constraints; some senators voiced concern that using reserves and increased borrowing to smooth the package risks larger out‑year deficits.

- In‑home supportive services (IHSS): The legislature rejected proposed cuts to IHSS, including a reduction in the overtime cap, and left in place six‑month protections for individuals who must re‑enroll, according to Legislative Analyst Office testimony and comments from members who represent seniors and people with disabilities.

- Homelessness and housing: The package restores $500 million for the Homelessness Assistance Program (HAP) and includes funding for low‑income housing tax credits and multifamily production. Several senators urged additional and ongoing investment, calling the restored HAP amount an important step but not sufficient.

- Disaster recovery and transit loans: AB 101 includes one‑time general fund loans to assist Los Angeles recovery from recent wildfires and a loan program to help Bay Area transit agencies and other local governments facing fiscal stress, according to the legislative summary presented to the committee.

- Proposition 36 and other voter‑mandated costs: The package contains $100 million tied to Proposition 36 implementation — the record cited $30 million for trial courts and $50 million to the Department of Health Care Services for behavioral health — and maintains some Proposition 56 supplemental dental payments for the near term.

Staff presentations and fiscal context

Carolyn Chiu of the Legislative Analyst’s Office told the committee the legislature’s package uses additional internal borrowing and reduces the Special Fund for Economic Uncertainties (SFEU) from $4.5 billion in the May revision to $2.0 billion, while keeping about $11 billion in the Budget Stabilization Account (the rainy day fund).

Jessica Holmes of the Department of Finance said the administration was reviewing the two‑house agreement and warned the legislature’s plan does not achieve the same level of savings as the May revision and incorporates roughly $2.5 billion in additional investments above the May revision.

Public comment highlights

Several organizations urged changes or flagged priorities during the public comment period. Habitat for Humanity California, San Diego Housing Commission and others asked for restoration or dual support for CalHome and down payment assistance programs. Providers and advocacy organizations — including United Domestic Workers, the California PACE Association, family justice center representatives and victims’ services groups — urged protection of IHSS, Medi‑Cal access, VOCA backfill and services for survivors and older adults. Family Justice Center advocates asked the Legislature to fund a modest, ongoing program that they said has been level‑funded despite rising demand.

Formal action and next steps

Senator Wahab moved to pass AB 101 to the Senate floor; the motion carried in a roll call vote, 10 in favor and 6 opposed. The committee chair announced the bill is now “out” of committee and will proceed toward final floor consideration after the Assembly and the governor complete negotiations.

What was not decided or remains unsettled

Committee debate and witnesses emphasized that the package relies on borrowing, fund shifts and reduced special‑fund balances to limit immediate cuts. Several members warned those choices increase structural deficits in future years and may require revisiting the budget if federal policy or revenues change. Multiple senators and organizations said additional work is likely in negotiations with the governor and in subsequent trailer bills.

Ending

The Budget Committee adjourned after the vote; the measure will move to the full Senate for further consideration as the Legislature and governor continue negotiations on a final 2025–26 state budget.