California Budget Update - January 2026
California State Budget 2026-27
Impact Analysis: San Joaquin County & Lodi
Executive Summary
The 2026-27 California State Budget released in January 2026 provides significant opportunities for San Joaquin County and Lodi through direct infrastructure investments, competitive grant programs, and formula-based funding allocations. This analysis identifies over $50 billion in statewide education, public safety, health, water, housing, and climate programs with specific relevance to the Central Valley region.
Direct Infrastructure Investments
Stockton Courthouse Expansion
Investment: Three new courtrooms for Stockton as part of $350.9 million Judicial Branch projects
Impact: Enhanced judicial capacity for San Joaquin County court system; accommodates new judgeships; part of 14 statewide projects totaling $2.7 billion over five years
Dos Rios State Park
Investment: Ongoing operations and management at San Joaquin County confluence
Impact: California's first new state park in ten years provides floodplain habitat, climate resilience, and public recreation access in underserved communities
Water Management & Flood Control
Sacramento-San Joaquin Delta Projects
Flood Control Funding: $232 million for levees, weirs, bypasses, and State Plan of Flood Control facilities; includes specific Sacramento-San Joaquin Delta projects
Delta Levees Program: $14 million one-time General Fund for mitigation of levee safety projects; compensatory mitigation required by state/federal law
San Joaquin River Settlement: $25 million ($9.5M Proposition 1 + $15.5M Proposition 4) for Eastside Bypass Control Structure Fish Passage Rock Ramp to improve salmon and native fish passage
Drinking Water & Infrastructure
Drinking Water Projects: $173 million for small/disadvantaged communities; failing water systems and failing private wells
Regional Conveyance Projects: $68.8 million for repairs to existing infrastructure (2026-27 priority) and competitive grants for regional projects delivering water supply reliability and groundwater recharge
San Joaquin River Basin Programs
Salmon Restoration: $5 million ongoing General Fund + 3 positions for operation of newly-constructed San Joaquin Research and Conservation Hatchery continuation of San Joaquin River Restoration Program supporting Merced River Hatchery
Education
K-12 Education Funding
Per Pupil Funding
Proposition 98 General Fund—highest level ever; 74.6% increase over 2018-19
Total Per Pupil
All funding sources; 60.8% increase over 2018-19
Total TK-12 Budget
$88.7B General Fund + $60.4B other funds statewide
Key Programs for San Joaquin County Schools
- Local Control Funding Formula (LCFF): 2.41% cost-of-living adjustment + ~$2 billion in discretionary funds for LEAs
- Community Schools Expansion: $1 billion ongoing Proposition 98 General Fund; already 2,500 schools participating (1 in 4); expansion to more high-need schools
- Special Education: $509 million ongoing increase for full equalization of special education rates statewide
- Before/After/Summer School: $62.4 million ongoing increase; guaranteed $1,800 per pupil for Tier 2 LEAs
- Teacher Preparation: $250 million one-time for educator residency programs through 2029-30
- Career Pathways: $100 million one-time for dual enrollment and college/career access
- Universal School Meals: ~$1.8 billion ongoing for two free meals per school day for all TK-12 students
- School Facilities (Proposition 2): $1.5 billion allocation in 2026-27 from $8.5 billion total authorization
Higher Education
San Joaquin Delta College & California Community Colleges
Total CCC Funding: $15.4 billion General Fund and property taxes (50% increase since 2018-19)
- COLA and Growth: $240.6 million (2.41% COLA) + $31.9 million (0.5% enrollment growth)
- Deferred Maintenance: $120.7 million one-time
- Student Support Block Grant: $100 million one-time
- Credit for Prior Learning: $37 million ($2 million ongoing)
- Community College Facilities: $736.9 million Proposition 2 bond funds (10 new + 29 continuing projects)
- Student Financial Aid: More than doubled from 429,306 (2018-19) to 871,292 (projected 2025-26)
Public Health & Behavioral Health
Behavioral Health Services Act (Proposition 1)
Available Funding: $636 million allocated to 1,818 units to date; $1.6 billion available over coming year for housing and services for people experiencing homelessness
Housing Intervention Programs: Beginning July 2026, 30% ongoing allocation for housing intervention; counties receive sustained resources for housing stability for individuals with behavioral health needs
System Transformation
BH-CONNECT Initiative: Nearly $8 billion total funds over five years to expand community-based services and evidence-based practices
Overall Investment: Over $10 billion across Health and Human Services departments since 2019
CARE Court Implementation
Judicial Branch Funding: $32.9 million ongoing General Fund (2025-26) + $17.4 million ongoing for legal counsel
Purpose: First-in-nation framework for individuals with untreated schizophrenia and psychotic disorders; court-ordered CARE Plans with community-based treatment
School-Based Behavioral Health
Investment: ~$4.2 billion non-Proposition 98 General Fund Children and Youth Behavioral Health Initiative integrating schools, health plans, and county services
Behavioral Health Fee Schedule: Effective January 1, 2025; private health plans reimburse participating LEAs for school-based behavioral health services
Public Safety
Overall Investment
Total Funding: ~$2.1 billion ($1.8B General Fund + $300M special funds) since 2021-22; $194.6 million in 2026-27
Competitive Grant Opportunities
CalVIP (Gun Violence Prevention)
2026-27 Funding: $51.9 million from Gun Violence and Prevention and School Safety Fund
Eligibility: Cities, counties, tribal governments disproportionately impacted by gun violence; community-based organizations also eligible
Organized Retail Theft Support
Total Available: $397.6 million
- Local Law Enforcement Grants: $255 million
- Vertical Prosecution Grants: $26 million
- Retail Theft Task Forces: $110 million (permanent expansion)
Community Public Safety
Total: $636.8 million
- Nonprofit Security Grants: $300 million (state funding ends 2025-26; Administration working on May Revision proposal)
- Law Enforcement Mutual Aid: $85 million
- Child Protection: $39 million ongoing
Drug Interdiction
Funding: $30 million General Fund ($15M in 2026-27, $15M in 2027-28)
Purpose: Military Department assistance to combat fentanyl trafficking; support for federal, state, local, and tribal law enforcement; Total investment to date: $90 million
Community Corrections Performance Incentive
2026-27 Funding: $127.9 million General Fund
Purpose: Incentivizes counties to reduce felony probationers sent to state prison; over $1.5 billion allocated to counties since inception
Victim Services & Emerging Needs
Total Investment: $546.8 million
- Human Trafficking Victim Assistance: $100 million
- Federal VOCA Supplemental Funding backfill: $303 million
- Missing and Murdered Indigenous Persons: $42 million
Housing & Homelessness
Affordable Housing Funding
Cap-and-Invest Proceeds: Up to $560 million annually administered by Housing Development and Finance Committee
Production Results (since 2019): Nearly 1.36 million housing permit applications; ~600,000 homes built; 81,000 affordable homes funded through core programs
Homelessness Programs
Homekey Program
Investment: $2.25 billion for individuals with mental health/substance use challenges and veterans
Results: Serving nearly 16,000 homes across 250 projects; reached over 172,000 Californians
HHAP (Homeless Housing, Assistance, and Prevention)
Total Appropriated: Over $5 billion
- 6th Round: $1 billion
- 7th Round: $500 million (contingent on enhanced accountability and performance requirements)
State Results
California Progress (2024): 3% increase in homelessness (vs. 18% nationally); significant reduction in veteran homelessness; progress in reducing youth homelessness
Water & Climate Resilience
Wildfire Prevention & Forest Resilience
Local Fire Prevention Grants
Funding: $58 million for wildfire prevention and hazardous fuels reduction projects in and near wildfire-threatened communities
Community Resilience Centers
Funding: $55.3 million for neighborhood-level shelters during climate and other emergencies; year-round services and programming
Urban Forestry Program
Funding: $22.8 million for CAL FIRE Urban and Community Forestry Grant Program; special consideration for disadvantaged/low-income communities
CAL FIRE Capacity Building
Total Budget: $5.3 billion ($2.2B General Fund) + 14,044 positions
- 66-hour workweek implementation: Peak staffing 9 months/year (previously 4-5 months)
- Enhanced defensible space inspections: $6.2 million + 31 positions for 250,000 annual parcel inspections
- Forestry Corps: $9.4 million ongoing
Extreme Heat Mitigation
Programs Available
Total Budget: $241 million
- Transformative Climate Communities: $137.4 million for community-led development in disadvantaged communities
- Community Resilience Centers: $55.3 million
- Urban Forestry: $22.8 million
Agriculture & Central Valley
Climate Smart Agriculture
Total Budget: $89 million
- Tribal Food Sovereignty Program: $14 million for irrigation/water/food processing infrastructure
- Regional Farm Equipment Sharing Program: $14 million to facilitate equipment sharing among small farmers
- Previous Projects (since 2019): Nearly 3,000 projects across 300,000 acres; saved 1.5 million acre-feet of water
Agricultural Land Conservation
Funding: Up to $240 million annually from Cap-and-Invest proceeds administered by Strategic Growth Council for flexible, catalytic infrastructure investments aligned with regional priorities
Key Opportunities for San Joaquin County & Lodi
Competitive Grant Programs
| Program | Available Funding | Purpose |
|---|---|---|
| Local Fire Prevention Grants | $58M | Wildfire prevention and hazardous fuels reduction |
| Community Resilience Centers | $55.3M | Neighborhood emergency shelters and year-round services |
| Urban Forestry | $22.8M | Tree planting and care (priority: disadvantaged areas) |
| CalVIP Gun Violence Prevention | $51.9M | Community-based violence reduction programs |
| Organized Retail Theft Grants | $255M (LE) + $26M (prosecution) | Law enforcement and prosecution support |
| HHAP Round 6 | $1B | Homeless housing and services |
| HHAP Round 7 | $500M | Homelessness prevention (contingent on accountability) |
| Behavioral Health Services | $1.6B available | Housing and behavioral health support |
| Drinking Water Projects | $173M | Small/disadvantaged community water infrastructure |
| Affordable Housing Programs | $560M annually | Cap-and-Invest housing development |
| Community Schools Grants | $1B ongoing | Expansion to high-need schools |
Formula-Based Funding (Receives Share)
| Program Type | Total Statewide | Distribution Method |
|---|---|---|
| LCFF School Funding | $149.1B ($88.7B GF) | Formula-based to all LEAs |
| Special Education Equalization | $509M increase | Formula-based equalization statewide |
| Community College Funding | $15.4B | San Joaquin Delta College receives share |
| Community Corrections Incentive | $127.9M | Formula-based county share |
| Proposition 47 Savings | $81.3M | Formula-based county distribution |
Critical Timelines & Implementation
Important Dates
- Governor's Budget: Released January 2026
- May Revision: Expected May 2026 (updates revenue and balances 2027-28 deficit)
- Final Budget Act: Typically June 2026
- Program Implementation: Most effective July 1, 2026 (FY 2026-27)
Potential Risks & Budget Constraints
Structural Budget Challenges
- State Deficit Projection: $22 billion projected shortfall in 2027-28
- UC/CSU Deferrals: Multi-year compact payments deferred; may impact higher education funding
- One-Time Funding: Many programs use one-time appropriations not guaranteed to continue
- Federal Policy Risk: H.R. 1 creates $1.4 billion additional state costs in 2026-27 (Medi-Cal: $1.1B; CalFresh: $300M)
- Uncertainty: Federal tariff, immigration, and other policy changes may impact state revenues
Programs with Enhanced Requirements
- HHAP Round 7: Contingent on enhanced accountability and performance requirements
- Nonprofit Security Grants: State funding ends 2025-26; Administration working on May Revision proposal
- Behavioral Health Services: High demand with potential federal Medicaid restrictions
Key References & Resources
- CAL FIRE Urban and Community Forestry: CAL FIRE UCF Programs
- California CalEnviroScreen Tool: OEHHA CalEnviroScreen
- Transformative Climate Communities: Strategic Growth Council TCC
- California Community Colleges: California Community Colleges Chancellor's Office
- Homeless Data Integration System: Cal ICH HDIS
- Department of Water Resources: DWR Water Resilience
- County Advantage: Contact San Joaquin County Administrative Office and Lodi City Manager for partnership coordination
Document Information
Analysis Prepared: January 2026
Source: California Governor's Budget
Summary 2026-27
Purpose: Comprehensive impact analysis for San Joaquin County and Lodi,
California
Scope: Public safety, public health, mental health, education, homelessness,
utilities, water management, and affordable housing