Sonoma County budget forecast shows modest deficit for FY 2026–27; insurance and HR1 drive uncertainty

County budget staff presented a five-year general fund forecast on Friday that shows a status-quo projected deficit of about $4.7 million for FY 2026–27 and a risk of substantially larger shortfalls under a mild-to-moderate downturn scenario.

Peter Broulin, the county’s budget manager, told the board that rising insurance costs are a major near-term driver: employee health insurance costs are projected to increase about 14% and general liability costs could rise roughly 23–27%, adding roughly $6 million over the current baseline for liability premiums and pushing general-fund costs into the mid- to high‑20s of millions overall in the forecast horizon.

Broulin also outlined how state and federal changes could affect revenues and expenditures. He highlighted the potential impacts of federal HR1 changes — most notably on SNAP/CalFresh and Medi‑Cal eligibility — and said the county expects about $2.8 million in local costs related to SNAP impacts in the coming fiscal year and a potential workload increase tied to Medi‑Cal eligibility changes that could affect tens of thousands of residents.

The forecast assumed roughly 4% annual property-tax growth but noted broader sources such as sales tax and documentary transfer tax have softened. Broulin walked the board through an economic downturn scenario that could raise the five‑year deficit to multiples of the baseline figure.

Supervisors asked for more concrete historic data on insurance increases and urged that liability insurance trends be included in legislative outreach. The board discussed options to prioritize safety-net spending and consider budget frameworks for recurring federal and state uncertainty.