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CBHA Responds to Governor Newsom’s May Revise of the 2025-26 Budget Proposal
SACRAMENTO, CA — May 14th, 2025— The California Behavioral Health Association (CBHA) responds to Governor Gavin Newsom’s May Revision of the 2025-2026 state budget with concern and cautious optimism. While the revised budget maintains some essential behavioral health investments, it includes significant cuts and delayed commitments that threaten to destabilize California’s behavioral health system at a time of growing need.
The state continues to face a projected shortfall—estimated by the Governor’s office at $12 billion —which has prompted broad reductions across Health and Human Services in the state, and Medi-Cal coverage and eligibility. CBHA acknowledges the Administration’s efforts to preserve core initiatives and continue advancing long-term reforms such as Proposition 1 implementation and CalAIM. However, the May Revise includes reductions and deferrals that could undermine the progress made toward a more equitable and responsive behavioral health system.
Areas of Concern:
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Enrollment Freeze for Full-Scope Medi-Cal Expansion for undocumented adults 19 and older—estimated to reduce spending by $86.5 million in 2025-26, but risks cutting off access to care for vulnerable communities.
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Tiered Rate Structure Implementation and the Foster Care Tiered Rate Structure Trigger are delayed or subject to future funding, leaving provider readiness and financial stability in limbo.
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Reductions in Key Programs that support behavioral health capacity, including:
- $5.6 million cut to Implicit Bias Training,
- $17.6 million cut to the Direct Service Professional Workforce Training Program,
- Over $195 million in cuts to Department of State Hospital Programs, and
- A $232.5 million reduction to the Incompetent to Stand Trial Infrastructure Grant Program.
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Prescription Drug Utilization Management policies may delay or reduce access to needed medications for behavioral health clients.
- $452.5 million in cuts to Prospective Payment Services for state-only Medi-Cal services at Federally Qualified and Rural Health Centers and Clinics.
Notable Investments:
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$17.5 million in one-time funding to support capacity for 988 Suicide and Crisis Lifeline Centers.
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$1.9 billion for the Behavioral Health Workforce Initiative, launching January 2026, to build and sustain a more diverse and resilient workforce.
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$200 million in Proposition 35 Flexible Housing Subsidy Pool funds over two years to support housing for individuals with serious behavioral health conditions.
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$21.5 million for the CalAIM Justice-Involved Initiative that expands Medi-Cal support for incarcerated individuals transitioning to community care.
CBHA calls on the Legislature and Administration to take additional steps in the final budget to safeguard California’s behavioral health transformation.
"We appreciate the state’s continued investments into the Behavioral Health Workforce and Crisis Response, but proposed cuts to behavioral health services will harm the very communities most in need. Slashing PPS payments and critical treatment funding puts safety-net providers and Californians at risk. We urge the Legislature to protect core behavioral health funding.” - Le Ondra Clark Harvey, Ph.D., CEO of CBHA
CBHA urges lawmakers to work collaboratively with providers, advocates, and consumers to ensure that the Enacted Budget reflects California’s commitment to behavioral health equity, workforce development, and care access for all.
For more information on the Governor’s May Revise:
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