Governor Payne Releases $51.15 Billion Proposed State Budget for FY 2027–28, Prioritizing Education and Health Care

FOR IMMEDIATE RELEASE November 6, 2026

Contact: Office of the Governor, Communications Department, State of San Andreas Press@sa.gov | (555) 0100-GOV

LOS SANTOS, SA — Governor Isabel Payne today released her administration's proposed $51.15 billion state budget for Fiscal Year 2027–28, outlining a spending plan that makes historic investments in public education, protects access to health care, strengthens essential public services, and maintains fiscal discipline.

The proposed budget totals $51,151,281,693, representing an increase of approximately $1.59 billion, or 3.21%, over the current fiscal year's enacted budget of $49.56 billion.

The proposal remains approximately $48.7 million below the state's $51.2 billion constitutional spending limit established under Article X, Section 20 of the San Andreas Constitution.

"Every budget is a statement of priorities, and this budget makes ours unmistakably clear," said Governor Payne. "We are putting our students first, protecting health care for families who depend on it, and making responsible investments in the services that keep our communities safe and healthy."

"We are doing all of that without exceeding our constitutional spending limit, and without asking every department to spend more simply because additional funding is available."

Historic $1.045 Billion Increase for Public Education

The Governor's proposal includes an additional $1.045 billion for the Department of Education, bringing total departmental funding to approximately $8.91 billion, a 13.3% increase over the current fiscal year.

The investment represents the largest single increase in the proposed budget and is designed to address longstanding challenges in school finance, educator retention, and educational outcomes.

The proposed investments include:

$520 million to increase base per-pupil funding, accounting for inflation and projected enrollment changes.
$210 million to reduce the shortfall between the state's school finance formula and actual appropriations.
$95 million for special education services, including support for students with significant disabilities.
$85 million for teacher recruitment and retention, including starting salary assistance and mentoring programs.
$45 million for early literacy and mathematics intervention.
$40 million to support rural and small school districts.
$30 million for English language learner programs.
$20 million to expand access to school counselors, psychologists, and social workers.

"For too long, we have asked our schools to do more while struggling to provide the resources necessary to meet the expectations we place upon them," Payne said.

"This budget begins to close that gap. It means more support for teachers, more resources for students with disabilities, and more funding for rural districts that face unique challenges."

The Governor emphasized that increasing per-pupil funding and reducing the school finance formula shortfall are central commitments of her administration heading into the 2027 legislative session.

$545 Million Investment to Protect Health Care Coverage

The proposed budget also provides an additional $545 million for the Department of Health Care Policy and Financing, bringing its total appropriation to approximately $21.09 billion.

The 2.7% increase is intended to preserve health care coverage for eligible residents, address increasing Medicaid enrollment and utilization, and improve access to medical and behavioral health services.

Major investments include:

$260 million to cover projected Medicaid enrollment and service utilization growth.
$150 million for a 2% across-the-board Medicaid provider reimbursement increase.
$55 million to expand behavioral health treatment capacity and crisis services.
$45 million to increase wages for home and community-based direct care workers.
$20 million to support enrollment growth in the Children's Basic Health Plan.
$15 million to modernize eligibility processing systems and reduce administrative backlogs.

"Health care coverage is not meaningful if patients cannot find a doctor, a clinic, or a treatment provider willing and able to serve them," Payne said.

"Our proposal recognizes that maintaining coverage requires investing in the providers and workers who deliver that care, particularly in rural communities and behavioral health settings."

The Governor also acknowledged the financial risks associated with Medicaid enrollment forecasts, emphasizing that her administration will continue monitoring costs throughout the budget process.

Targeted Investments in Children, Public Safety, and Essential Services

Beyond education and health care, the proposed budget provides targeted increases for seven additional departments.

The Department of Human Services would receive an additional $40.66 million to strengthen child welfare caseworker staffing, increase foster care provider reimbursement rates, and establish 24 additional adult inpatient psychiatric beds.

The Department of Early Childhood would receive $19.95 million in additional funding to expand child care assistance to approximately 2,000 more children and increase reimbursement rates for licensed child care providers.

Additional investments include:

Public Health and Environment: $12.83 million for local public health agencies, disease surveillance, and drinking water testing.
Judicial Department: $12.07 million to address court-appointed counsel caseloads and judicial backlogs.
Public Safety: $12.01 million for wildfire aviation resources, crime laboratory staffing, and victim services.
Natural Resources: $7.43 million for wildfire fuels reduction, water conservation, and state park maintenance.
Military and Veterans Affairs: $3.21 million to improve veterans community living center staffing and expand county veterans service officer grants.

"Protecting public safety means more than responding after an emergency has occurred," Payne said. "It means preparing for wildfires, reducing court backlogs, supporting crime victims, and making sure our public health systems have the resources to respond when communities need them."

Administration Proposes $107.7 Million in Savings

To accommodate targeted spending increases outside education and health care, the Governor's proposal identifies approximately $107.65 million in savings across six departments.

The reductions are intended to come from administrative efficiencies, declining program demand, debt refinancing, and the expiration of one-time expenditures rather than reductions in direct public services.

Proposed savings include:

Department of Corrections: $38.24 million through consolidation of underutilized prison housing units and adjustments reflecting declining incarceration levels.
Department of the Treasury: $31.97 million through debt refinancing.
Department of Personnel: $12.42 million through office lease consolidation, fleet adjustments, and procurement efficiencies.
Governor, Lieutenant Governor, and State Planning and Budgeting: $11.13 million through administrative reductions and the expiration of one-time information technology funding.
Department of Revenue: $8.29 million through increased use of digital tax filing and vehicle registration services.
Department of Local Affairs: $5.60 million through the scheduled expiration of one-time grant programs.

The Governor highlighted the proposed reduction in her own office's budget as an example of the administration's commitment to shared fiscal responsibility.

"If we are asking departments across state government to find efficiencies, the Governor's Office must be willing to do the same," Payne said.

"Fiscal responsibility begins with leadership. We cannot ask taxpayers to accept wasteful spending, and we cannot expect agencies to make difficult decisions while exempting ourselves from those same expectations."

Eight Departments to Maintain Current Funding Levels

Under the proposal, eight departments would maintain their current fiscal year appropriations, including Transportation, Higher Education, Agriculture, Labor and Employment, Regulatory Agencies, Law, State, and the Legislative Department.

The Department of Transportation would retain approximately $2.30 billion in funding, allowing ongoing highway and transit projects to continue.

Higher Education would maintain approximately $6.56 billion in funding, with institutions asked to limit resident tuition increases to no more than inflation.

The administration expects departments receiving flat funding to manage inflationary pressures through vacancy savings and operational improvements.

Budget Maintains Margin Below Constitutional Spending Limit

The proposed budget leaves approximately $48.7 million unappropriated beneath the constitutional spending limit.

The administration identified Medicaid enrollment and utilization as the largest potential fiscal uncertainty.

A 1% deviation in Medicaid cost projections could result in approximately $211 million in additional expenditures, exceeding the remaining budget margin.

The proposal therefore includes contingency measures that could be considered if actual costs or revenues differ from forecasts, including supplemental appropriations and adjustments to the timing of certain expenditures.

"We have built this budget around realistic priorities, but we are also being transparent about the risks," Payne said.

"An unexpected change in Medicaid costs, federal funding, or state revenue could require adjustments. That is why we have identified contingency options rather than pretending that economic uncertainty does not exist."

Proposal Heads to General Assembly for Consideration

The Governor's proposed budget will now serve as the administration's starting point for negotiations with the San Andreas General Assembly during the 2027 legislative session.

The Joint Budget Committee will examine departmental requests, fiscal projections, spending priorities, and potential adjustments before preparing the state's annual appropriations legislation, commonly known as the Long Bill.

The 78th General Assembly is scheduled to convene on January 13, 2027.

The Governor emphasized that the proposal is not a final appropriation and that lawmakers will have an opportunity to evaluate, amend, and debate its provisions.

"This is the beginning of the budget conversation, not the end of it," Payne said.

"I look forward to working with the Joint Budget Committee, legislative leadership, and members of both parties to deliver a responsible budget that reflects the needs of the people we serve."

The administration will also provide a more detailed breakdown of General Fund, cash fund, and federal funding sources as part of its formal Long Bill request.

Governor: 'A Budget That Invests in Our Future'

Governor Payne concluded by describing the proposal as an effort to balance long-term investment with immediate fiscal responsibility.

"This budget recognizes a simple truth: investing in our future and living within our means are not mutually exclusive," Payne said.

"We can provide our schools with the resources they need. We can protect health care coverage. We can strengthen public safety, support veterans, and help families access child care. And we can do those things while making government more efficient."

"The people of San Andreas expect results, not excuses. This proposal is our plan to deliver those results."

Next Steps: Joint Budget Committee review and development of the FY 2027–28 Long Bill during the 2027 legislative session.

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