Assemblymember Dixon Comments On Governor Newsom’s Problematic Proposed Budget for 2026-2027

SACRAMENTO (January 14, 2026) – Assemblymember Diane Dixon (R-Newport Beach) comments on Governor Newsom’s 2026-27 proposed budget.

On Friday, January 9, the Governor released the proposed 2026-2027 budget for California. The total state budget is estimated at $539 billion, including $190.1 billion in federal funds. Total state spending is projected at $348.9 billion, an increase of $27.8 billion over the 2025 Budget Act.

The annual budget continues to operate with chronic deficits and structural spending

remains imbalanced. The Legislative Analyst’s Office projects a nearly $30 billion deficit, a situation that has persisted for the past three years. Multiyear budget deficits going forward through 2030 are alarming, affecting all Californians throughout the State. Although the

Governor celebrates new projected revenues, California remains the highest in the nation for gas prices, electricity prices, rents and mortgages. Every day, it is our communities and families that feel the detrimental impact of this deficit.

“This is the third year in a row in which the State is experiencing a budget shortfall. The mismanaged budget is causing Californians to suffer across the board and the State’s spending issue needs to be addressed properly. From the gas pump to paying everyday bills, our communities feel the mounting costs of everyday life, causing them to leave the Golden State to flee to more affordable areas,” said Assemblymember Dixon.

The proposed budget prioritizes major projects associated with the Governor’s tenure, including allocating more than $12 billion annually from the General Fund to provide full-scope Medi-Cal benefits for undocumented immigrants and $1 billion per year for the High-Speed Rail Authority through 2045-46. “The failure of the high-speed rail isn’t just about delays and cost overruns—it’s a glaring example of government mismanagement and misplaced priorities. While we continue year after year to funnel billions upon billions into this project, Californians are facing pressing challenges in their daily lives that demand immediate attention” said Assemblymember Dixon.

On top of the avoidable operating deficit, the Governor failed to provide funding for crucial programs, services and initiatives that support our communities, all while neglecting affordability and public safety. For example:

• There is no funding for vertical prosecution grants to County District Attorneys in order to support victims of human trafficking. This is entirely unacceptable.
• The Budget provides no direction for the California Air Resources Board or California Energy Commission to reduce the cost of gas and electricity for Californians.
• The Budget fails to help employers who are dealing with the annual tax increases, making it more expensive to operate in California. Increased taxes on employers are projected to be $1.6 billion in 2026 and $2.0 billion in 2027.
• For another consecutive year, the Governor’s budget disregards the will of voters by failing to fund Proposition 36 and, as a result, does not fulfill the requirements of the Specifically, the budget omits ongoing funding for mental health or drug treatment programs required for individuals charged with a treatment-mandated felony under Proposition 36.
• The Governor has not provided significant new funding for housing and homelessness, resulting in a roughly 56 percent decrease in spending compared to the previous year, including a failure to include $500 million for the State Low-Income Housing Tax Credit program to help finance affordable housing development projects.

“It is unfortunate that the Governor continues to ignore funding priorities that will help our communities such as treatment programs for Proposition 36, vertical prosecution grants to the County District Attorneys to support victims of human trafficking and more. We need to set our priorities straight for state spending and eliminate wasteful spending.” said Assemblymember Dixon.

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