Inside Sacramento: Trailer Bills Enter the Scene 

CSAC has a finger on the pulse of political and governmental activity in Sacramento and cuts through the noise to deliver the trends, insights, and key developments necessary to keep counties well-informed. Here’s what you need to know about the state budget development process for 2026-27 this week:  

California Department of Finance Releases Trailer Bills  

Policy wonks, budget hawks, and anyone else keenly interested in nerdy details of the Governor’s budget proposal for 2026-27 eagerly awaited the February 1 deadline for the Administration to publish the “trailer bill” language (TBL) that accompanies the main budget bill(s).   

The Department of Finance maintains a list of TBL proposals that accompany the Administration’s budget proposals on its website. Some TBL proposals have been posted, and we expect that more proposals will continue to be posted in the coming weeks, and at the time of the May Revision to the Governor’s 2026-27 budget proposal.  

CSAC legislative staff will analyze the contents of TBL for their impact to county governments and will publish more information and commentary on specific subjects in the coming weeks and months. Notable proposals for county governments include:  

• The H.R. 1 TBL would implement the various provisions of H.R. 1 to conform California’s Medicaid program, Medi-Cal, to federal law. Provisions of the TBL would conform to federal law as it relates to Medi-Cal eligibility and redetermination processes, verification of new work and community engagement requirements, and shifting additional immigrant populations no longer eligible for federally funded Medicaid to restricted scope, state only Medi-Cal. Additional information on how the state is preparing to implement the required changes to Medi-Cal under H.R. 1 can be found in the Department of Health Care Service’s (DHCS) recently released Implementation Plan. 

• The In-Home Supportive Services Assessed Hours TBL would enact the January Budget proposal to shift the costs of growth in certain IHSS hours from the state to counties. This proposal would go into effect in 2027-28 and achieve an estimated $233.6 million in state General Fund savings. The TBL outlines that the California Department of Social Services (CDSS) would establish a statewide average for authorized IHSS hours per case and that counties with an average above that amount would be responsible to pay 100 percent of the nonfederal share for their increased hours above that average. The language does not specify the mechanism for how this payment would occur and directs CDSS to work with the County Welfare Directors Association to implement this provision. CSAC is strongly opposed to this proposal and shared initial concerns in our budget letter. 

• The Behavioral Health Services Act Revenue and Stability TBL would implement recommendations included within Behavioral Health Services Act (BHSA) Revenue Stability Report that was released by DHCS in May 2025, primarily by reducing the level of prudent reserves that counties can maintain. The report, which CSAC summarized shortly after its release, was developed pursuant to SB 326 (Eggman, Chapter 790, Statutes of 2023) and was intended to provide policymakers with recommendations on how to manage BHSA revenue volatility to better support the sustainability of county programs. CSAC is currently evaluating the language and is seeking input from counties on fiscal and programmatic impacts that could result from reduced local prudent reserve allowances.       

What are “trailer bills”? 

The budget bills and the trailer bills are the vehicles that carry the statutory language that authorizes budget appropriations and accompanying implementation language. This year, the Governor’s proposed budget for 2026-27 is reflected in budget bill vehicles AB 1563 (Gabriel) and SB 879 (Laird).  

Trailer bills accompany the main budget bill by enacting any corresponding changes to state law necessary to implement the programs and proposals in the budget. While the budget bill includes expenditure authority and sparse provisional language regarding the use of funds, the trailer bills include implementation language for specific appropriations. These bills are called “trailer” bills because they are not subject to the same deadlines as the budget proposal and therefore trail after the main budget bill is introduced. Pursuant to state law, all trailer bill language necessary to implement and accompany the Governor’s proposed state budget is due to the Legislature by February 1 annually (Gov Code Section 13308).