In the worst recession since the great depression, California's historic leadership of innovation and investment was replaced with budget reductions and the elimination of services and programs. What emerged in 2008 was the implementation of Budget Stakeholder Workgroups (BSWs) by the California Legislature, a process that is still used today. The BSW phenomena is conceived of as an alternative budgetary process that grants non-traditional stakeholders such as service recipients a seat at the table of California's budgetary decision-making process. The inclusion of non-traditional stakeholders is occurring at the same time that BSWs have become the venue to develop and implement large department reductions, specifically in the Health and Human Services arena. This study considers the historical evolution of California's BSWs through the Health and Human Services budgetary process and their impact on the institution. Expanding the field of institutional change, through interviews with administrators, legislative staff and members, lobbyist and advocates, this study addresses the issue of institutional change within a public bureaucratic institution. Unlike new institutionalism, this study demonstrates that institutional change is a process beyond conformity and acknowledges the agency of individuals. This study also documents gradual institutional change and extends sociological understandings of bureaucratic institutions as a positive process.