Santa Barbara County opens budget workshops as CEO warns of structural shortfall

Santa Barbara County launched its first day of FY2627 budget workshops on April 13, where county leaders laid out a two‑year strategy to manage a looming structural gap driven largely by changes at the federal and state level. County CEO Mona Masado told the Board that the week’s work is about “a cleareyed discussion, tough decisions, and our shared commitment to a sustainable future,” and that HR1 — changes in federal eligibility and funding rules — is a major driver reshaping safety‑net costs.

Budget Director Paul Clemente presented details of the preliminary forecast, saying departments proposed roughly $71 million in reductions to balance next year. After department requests and CEO recommendations, the county identified $7.4 million in unallocated general fund dollars available for targeted restorations concentrated on health and social‑service safety‑net programs, and preserved a $9.5 million set‑aside to reduce a projected FY2728 deficit of approximately $12.5 million. Clemente said the county is pursuing a two‑year approach rather than a single‑year fix, prioritizing reserves and limited restorations to avoid deeper cuts later.

The presentation emphasized revenue mix risks: while property tax growth keeps some discretionary revenue steady, declines in intergovernmental funding for programs such as CalFresh and child welfare reduce the county’s ability to draw down state and federal dollars. Clemente noted discretionary general revenue is projected to increase modestly but that many departments rely on non‑general fund sources that are under pressure.

Masado and Clemente repeatedly said the county’s discretion is narrower than many residents expect because county operations are shaped by state and federal mandates. “Mandates have increased while expectations have risen,” Masado said, adding that some service reductions are intended to avoid faster, more disruptive cuts later. She urged legislative advocacy and said the county is coordinating with regional and state partners to seek backfill if the May revise alters state support.

Board members pressed staff on choices under consideration, including temporarily redirecting the board’s 18% deferred‑maintenance allocation to cover operating needs, what restoration requests would meaningfully leverage state/federal match, and the timeline for action if the state’s May revise brings new resources. Clemente said the board could act later in June if state action materializes, and that staff can return mid‑year if circumstances change.

The workshops continue with department‑level presentations through the week; staff urged the public to use the functional‑group comment slots and warned that many numbers — particularly state actions related to HR1 and related May revise details — remain uncertain until the state process advances.