County officials told the Board of Supervisors on Dec. 9 that federal changes known as HR1, together with state policy decisions, could sharply increase Sacramento County’s share of administrative costs for CalFresh (SNAP) and force a renewal of county indigent‑care programs.

Ethan Dye, director of the Department of Human Assistance, said county modeling shows a range of possible administrative shortfalls. If the state provides additional funding the gap could be about $6 million; if the state does not augment funding, the department’s models show a potential exposure of roughly $23.4 million for 2026–27. “We are facing a possible $6M to $24M deficit,” Dye said in his briefing.

HR1 would change work‑requirement rules, tighten waiver rules, restrict some noncitizen eligibility categories and reduce the federal share of administrative costs from 50% to 25%, shifting more of the burden to states and counties. Dye said the state share would be expected to rise but that the state faces a budget shortfall; local officials do not yet know whether the state will backfill the additional cost. “We don’t know what the state is going to do,” Dye said.

County staff have already taken steps to reduce exposure, Dye said, including a hiring freeze, deleting vacant positions, converting temporary positions instead of adding full‑time staff and planning to close a large welfare office on 28th Street to save rent. “We have already implemented cost reductions and operational changes to reduce our risk,” he said.

Health services director Tim Lutz told the board separately that the county’s indigent medical programs — the county’s CMISP (County Medically Indigent Services Program) and the Healthy Partners program — face similar pressures. Consultants modeled three eligibility scenarios for a revived CMISP (138%, 200% and 400% of federal poverty level) with and without Healthy Partners; staff estimated startup and administrative needs including a CalSAWS module, utilization management and eligibility staffing.

Under the county’s modeling, a narrowly constructed CMISP at 138% of FPL with administrative costs and a reserve could cost roughly $29 million in year one (including start‑up and reserve), while a broader program at 400% of FPL would be larger. Lutz cautioned that the numbers are highly dependent on uncertain federal and state rules as they are finalized.

Supervisors pushed staff on practical questions. Supervisor Hume asked why the county had historically adopted a 400% FPL threshold for CMISP; staff replied that program rules and federal premium credit interactions drove earlier decisions and that case law requires a hardship review for certain high‑cost cases.

What officials want next

County staff asked the board for direction and said they will return in January with more detailed options and budgets. Directors emphasized that state and federal regulatory guidance — and possible litigation over HR1 provisions — could change the assumptions in their models.

What residents might see

If the county must absorb a large funding shortfall, staff said the department could further reduce vacancies, eliminate temporary positions, close leased offices and reallocate staffing — measures that would increase call wait times, slow application processing and raise error‑rate risk. Dye cautioned that reduced staffing would raise the county’s risk of noncompliance and litigation and lead to greater service delays for people who rely on CalFresh and other safety‑net programs.

Key quotes

• "We are facing a possible $6M to $24M deficit in CalFresh administrative funding if the state does not provide offsets," — Ethan Dye, director, Department of Human Assistance.
• "If care is delayed or lost, people get sicker and the county sees higher emergency‑room and hospital costs," — Tim Lutz, director of Health Services.

Next steps

Staff will update the board in January with refined budget models, proposed administrative changes and options for preserving Healthy Partners and indigent care services. Supervisors asked staff to pursue regional and state coordination while preparing contingency plans for county budget cycles.