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Solano County midyear report flags HR1-driven benefit changes and other budget risks
Summary
County finance staff presented a FY25‑26 midyear report showing a projected $32.4 million fund balance and identified major exposures — most notably federal HR1 changes that staff and outside estimates say could reduce eligibility for medical and SNAP benefits and raise county costs for indigent care and service delivery.
The Solano County Board of Supervisors received a midyear financial report on March 24 that projected a July 1, 2026 fund balance of about $32.4 million and warned of several significant budget exposures, including federal HR1 changes that staff said could shrink state‑funded medical and CalFresh rolls and shift costs locally.
County CEO staff and Budget Officer Tammy Lukans told the board the midyear projection uses revenues and expenditures through December 2025 and reflects recent labor agreements. The report forecasts a $2 million decrease in net county cost for the general fund and noted public safety revenue is down about $9.8 million. The county’s allocated positions are 3,289.25, while funded positions included in the budget total roughly 3,172.
Why it matters: county staff said federal and state policy shifts could materially change demand for services and the county’s cost exposure. The presentation cited an estimate from UCLA and statewide association modeling that suggested California could lose tens of thousands of medical enrollees after HR1 implementation; staff summarized local planning that shows the county could see thousands affected. County officials noted that reduced eligibility at the state level often results in higher uncompensated care locally and higher workload for eligibility and social‑service staff.
Chief points from the report: Lukans said departments used December 2025 actuals to project the rest of the fiscal year and that midyear estimates include one‑time lump‑sum payments tied to recent bargaining. The report recommends drawing $5.9 million from capital renewal reserves to keep projects moving and reallocating $9 million from completed or reprioritized projects into asset protection, with a $20.3 million asset‑protection target that may be reimbursed in part by FEMA. The presentation also flagged rising PERS and health‑benefit costs, inflationary pressures on materials and construction, and revenue losses tied to local business closures.
HR1 and service delivery: staff described HR1’s staggered implementation and said it will add verification and re‑determination workload (for example, more frequent eligibility checks) and could result in many residents losing coverage for medical care and CalFresh. Kelly Curtis, assistant director of Health and Social Services, said eligibility teams are working with community partners to prepare possible referral pathways but are awaiting federal and state guidance on specifics before launching programs. County staff recommended the board consider funding requests to support eligibility and outreach work in the recommended budget.
Board and public reaction: Supervisors pressed staff on contingency planning and whether the county can create local volunteer or job‑training pathways that help residents meet work or community‑service requirements tied to benefits. County staff and public commenters emphasized that any decline in preventive primary care will likely increase emergency and indigent‑care costs.
What happened next: The board voted to accept the midyear financial report and associated recommended actions, including the position resolution, appropriation transfers and fixed‑asset authorizations. Staff said more detailed budget recommendations will come at the June budget hearings and that several exposures remain contingent on state and federal decisions.
The board set budget‑hearing dates for June 25–30 and asked staff to return with recommended budget actions to address the identified exposures.
