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San Bernardino County previews cautious 2025–26 budget, sets aside reserves for pensions and human services
Summary
County CEO and CFO told the Board of Supervisors their recommended 2025–26 financial approach emphasizes prudence: smaller ongoing program growth, large employee-related set‑asides, and one-time pension and capital funding while retaining reserves for uncertainty.
San Bernardino County officials on Tuesday presented a conservative financial plan for fiscal year 2025–26 that emphasizes reserve-building and limited ongoing program expansions while keeping one-time funds available for capital and pension risks.
County Chief Executive Officer Luther (CEO) and Matthew Erickson, chief financial officer for the county finance department, told the Board of Supervisors the proposal is intended to balance continued service delivery with caution amid uncertain state and federal funding and market volatility. "What we've tried to do is balance allocating the resources, from the standpoint of not being overly conservative and still promoting growth in where it makes sense," Luther said during the presentation.
Erickson said the administration is projecting 3% annual property-tax growth in its five‑year forecast and is deliberately avoiding aggressive revenue assumptions. "We are projecting 3% property tax growth in our 5‑year forecast," Erickson said. He noted the county saw 6.7% annualized property‑tax growth over the previous decade but is using a lower projection to reduce volatility in planning.
The presentation outlined the administration's key budget features and notable set‑asides:
- A $74 million prior‑year funding pool already set aside for economic uncertainty and capital needs, described as funds that could be cut before core services in a downturn. Erickson described these as "areas where we do have a lot of needs within the organization for capital projects" but that can be scaled back if necessary.
- Employee costs: roughly $208 million reserved in the five‑year forecast to cover projected employee‑related negotiations and compensation commitments.
- Human services contingency: up to $55.7 million identified for human services programs in the forecast; county staff said they are working to reduce that contingency over the coming years in partnership with the human services departments.
- Ongoing new programs: $15.6 million of new ongoing general fund commitments proposed for 2025–26, down from larger allocations in prior years.
- Community concerns reserve: an existing $3 million ongoing allocation, with staff recommending adding about $2.1 million (as stated in the presentation) to address enforcement and community quality‑of‑life priorities such as illegal marijuana enforcement and illegal dumping.
- Public safety/jail contingency: $8.7 million ongoing set aside in case of post‑Proposition 36 changes that would increase jail needs.
- Pension/retirement reserve: $25 million proposed in one‑time funding to add to the county's retirement reserve in view of market volatility and the risk of lower investment returns than assumed.
Erickson walked supervisors through a five‑year general‑fund forecast that shows modest surpluses in the near term and growing uncertainty in the later out years. "We are looking at surpluses over the next two fiscal years," he said, noting that deficits are possible in later years under current revenue assumptions.
Supervisors commended staff for transparency and a conservative approach. Supervisor Hagman said the county's long‑term conservative posture has paid dividends, and Vice Chair Baca thanked staff for striking a balance between investments and financial stability. Supervisor Cook and others praised the clarity of the presentation.
Public comment during the budget segment included a request from Natalia Saka, regional policy advocate for the Coalition for Humane Immigrant Rights (CHIRLA), who urged the board to include immigrant and refugee communities in the 2025–26 budget with five specific investments: expanded legal services, community education programs, improved language access, affordable housing accessible regardless of immigration status, and job pathways for undocumented youth.
The county will publish the full budget book on May 20, followed by a public review period and a budget hearing and planned adoption on June 10.
The presentation was a "receive and file" financial update; no final budget adoption occurred at the May 6 meeting. The board will consider the formal budget adoption at a later date.
