SACRAMENTO, Calif. — End Child Poverty California (ECPCA), a statewide anti-poverty coalition, said this week that the final 2026-27 California state budget signed by Gov. Gavin Newsom includes significant new revenue measures to help protect low-income families, while warning the spending plan still leaves major gaps in health care and food assistance for Californians affected by federal cuts, according to a July 1 press release from the organization.
The state budget marks Newsom’s final spending plan before he leaves office in January. It also comes as California works to offset the impact of the federal reconciliation law known as H.R. 1, which ECPCA said could cause up to 3 million Californians to lose Medi-Cal coverage or food benefits.
The organization argued those federal reductions were enacted to help finance tax cuts benefiting wealthy corporations and billionaires.
ECPCA is powered by GRACE — short for Gather, Respect, Advocate, Change, Engage — and is sponsored by the GRACE End Child Poverty Institute. The coalition represents more than 200 partner organizations across the state advocating for policies that address child and family poverty.
According to the release, the new budget generates roughly $5 billion in ongoing revenue by extending an existing tax on health insurers, capping tax credits available to large corporations and applying sales tax to certain digital software purchases. ECPCA credited those measures with giving the state new tools to counter the effects of federal safety-net cuts.
Among the budget provisions ECPCA highlighted as positive are the addition of 22,770 new child care slots, continued funding for In-Home Supportive Services and the framework for a Fair Share Contribution program intended to hold large employers accountable to workers and taxpayers.
The release also pointed to $14 million allocated to preserve the CalFresh Outreach Network, $108 million for food banks through CalFood and $245 million to fund county eligibility workers in order to maximize the state’s federal drawdown of CalFresh benefits.
Other items ECPCA noted include a $100 million investment in legal services and deportation defense for immigrant communities, a 1.8% increase to CalWORKs grants beginning Oct. 1 and $5 million for the Jails 2 Jobs Program in Los Angeles County.
The budget additionally sustains funding for the California Earned Income Tax Credit, the Young Child Tax Credit and the Foster Youth Tax Credit, which ECPCA described as available to immigrant families excluded from comparable federal tax credits.
Despite those provisions, ECPCA said it was “deeply disappointed” that the budget only delays, rather than resolves, significant planned health care cuts, pushing difficult funding decisions into future budget cycles.
The organization also criticized the absence of investment in CFAP Plus automation, a program intended to deliver state-funded food benefits to people who lost CalFresh eligibility under H.R. 1’s cuts. ECPCA also noted the budget does not include cost-of-living increases for child care providers that reflect the actual cost of care.
Shimica Gaskins, president and CEO of ECPCA powered by GRACE, said in the release that the coalition remains focused on continued advocacy beyond this year’s budget cycle.
“We’re grateful California is fighting back against federal cuts through innovative funding and crucial protections for Medi-Cal,” Gaskins said, according to the release. “However, this budget by no means closes the books on our fight to protect California from this administration’s attacks on children, families, seniors, immigrants, and vulnerable communities. There is much more work to be done.”
The federal reconciliation bill referenced in the release, H.R. 1, was signed into law earlier in 2026 and has drawn criticism from anti-poverty advocates nationwide for its reductions to Medicaid and Supplemental Nutrition Assistance Program funding. Those changes have required state governments to absorb or offset the reductions through their own budgets.
ECPCA said it intends to continue pressing lawmakers through August budget action and into the next state budget cycle, advocating for continued investment in health care, food security and family stability programs statewide.
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