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County staff warns of multi‑year deficits as state, federal changes squeeze safety‑net programs
Summary
County officials presented a five‑year forecast showing structural gaps that could total tens of millions of dollars, driven by rising labor costs, jail expansion debt service and expected state/federal revenue reductions; staff recommended personnel controls, reprioritization and possible service reductions.
County budget officials told the Board on Dec. 16 that Santa Barbara County faces significant multi‑year fiscal challenges that will affect health, human services and other core programs. Budget Director Paul Clemente said a baseline forecast shows new ongoing deficits rising sharply in FY2026‑27 and FY2027‑28 if current cost trends and state/federal changes materialize.
Clemente presented an incremental forecast showing ongoing discretionary revenue growth that is outpaced by salary, benefit, rate and mandated cost increases. He said the county could balance FY2026‑27 using set‑aside reserves but would face an estimated $23 million ongoing deficit in FY2026‑27 and about $29 million in FY2027‑28 once health and human services shortfalls are included. “All told, these impacts when added into the base level forecast will lead to a $23,000,000 deficit next fiscal year and an additional $29,000,000 in fiscal year 2027‑28,” Clemente said.
CEO Mona Miyasawa told supervisors the pressures come from multiple sources: pension and salary growth, jail expansion debt service for the Northern Branch facility, and state and federal policy shifts that reduce reimbursements to county safety‑net programs, including Medi‑Cal and CalFresh administration. She highlighted staff recommendations: control personnel costs (hold vacancies, limit overtime), review general fund contributions, seek interim funding shifts, and pursue additional state and federal resources.
Supervisors and public commenters debated whether to prioritize preserving safety‑net services or protect long‑term capital plans such as the jail expansion. Several community members urged the Board to consider alternatives to costly jail construction and to reallocate funds to prevention and community programs.
The Board voted to receive the forecast and directed departments to prepare reductions, alternatives and further analyses for January and budget workshops in spring. County staff said they will return with department budget scenarios, debt/cash analyses for jail funding, and options to preserve critical services while balancing the general fund.
