Yolo County adopts budget principles and calendar; staff warns federal funding pause could affect programs

The Yolo County Board of Supervisors on Jan. 28 unanimously approved budget principles and a development calendar for the 2025–26 fiscal year while county officials warned of modest revenue growth, rising labor costs and a recent pause on federal funding that could complicate planning.

“While we are anticipating revenue growth in the 2025–26 fiscal year, that growth is projected to be modest and, in some cases, relatively flat,” said Laura Liddico, the county’s chief budget official. Liddico told supervisors that property tax is initially projected to grow about 4% (roughly $3.1 million) and that sales tax estimates show little to no growth.

Key budget drivers and risks County staff highlighted several cost pressures: anticipated 3% cost‑of‑living adjustments for bargaining units; a second year of phased equity increases (ranging 1%–6% in some units); and pension rate volatility tied to past CalPERS investment returns. Staff said they plan to reinstate a supplemental pension charge of 2.25% that had been paused in the current year to reflect the size of any budget deficit.

Representing immediate fiscal uncertainty, staff reported the Office of Management and Budget had, as of the previous evening, paused certain federal funding streams while conducting a review. “Deposit is effective as of 5 PM today,” said Alex Tengelks of the CAO’s office, describing the very recent federal notice. Tengelks said agencies are already locking down accounts and that the county and its Washington representatives are seeking clarification; the pause was expected to last at least through Feb. 10 and could continue longer.

Budget calendar and department guidance Departments will open budget submissions tomorrow and are asked to submit requests by Feb. 24; the board will receive a mid‑year update Feb. 25 and additional budget development updates March 11 and April 29. The recommended budget book is scheduled for release June 2, with a balanced recommended budget and hearing anticipated June 10.

Supervisor questions and board vote Board members asked clarifying questions about whether department requests should assume reductions and how vacancy savings are being treated. Staff said the recent “7% reduction exercise” focused on potential general‑fund savings but departments were asked first to submit budgets as in a normal year so staff can analyze the gap between projected revenues and expenditures.

The board voted unanimously to approve the budget principles and budget development calendar. The motion to approve was made by Supervisor Lucas Frerichs and seconded by Supervisor Reza Barajas.

What to watch Staff emphasized that revenue projections and the federal funding pause are evolving. Supervisors asked staff to return with further analyses, including lists of vacant general‑fund positions and options for budget balancing, and indicated willingness to hold interim briefings as new federal information arrives.