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San Bernardino County projects one‑time investments while flagging future deficits in five‑year forecast
Summary
County finance staff told the Board of Supervisors the 2026–27 budget shows a $32 million operating surplus but forecasts structural deficits later in the five‑year outlook tied to slower property‑tax growth and rising mandated costs; the administration proposed $273.7 million in mostly one‑time investments and reserves for liabilities and enterprise systems.
The San Bernardino County Board of Supervisors received a financial update on the county’s 2026–27 budget and five‑year forecast on the board dais. County Chief Executive Luther and CFO Matthew Erickson emphasized a near‑term surplus but persistent long‑term pressures from tepid property‑tax growth and mandated human‑services costs.
"We're positioning for a slower growth environment," Luther said, urging a prudent approach that balances one‑time investments and ongoing obligations. Erickson told the board staff projects assessed valuation (property‑tax base) growth of about 2.23 percent for the coming year — the slowest rate since roughly 2012 — and noted that every 1 percent growth in property tax equals roughly $10 million in general‑fund revenue.
Erickson said the forecast shows a $32 million operating surplus in 2026–27 but incremental deficits in later years as revenue growth slows and ongoing costs rise. To respond, staff proposed $273.7 million in targeted investments for the coming year — about $258 million of that one‑time spending — and roughly $15 million in ongoing allocations. Major recommended one‑time items include capital projects, public‑safety facility work, and a $40 million board allocation already set aside for a new human‑capital management system.
The administration also proposed building several reserves: a $25 million enterprise‑systems reserve to smooth future large software replacements, $30 million‑plus for sheriff capital projects, and stepped funding to rebuild law‑enforcement liability reserves to a policy target (an actuarial 80% confidence level). Erickson said the county would recommend a $5 million one‑time subsidy to help contract cities absorb an expected share of rising liability premiums next year.
Officials warned of long‑term employee cost pressures: negotiated labor contracts and retiree‑related obligations could add hundreds of millions in ongoing costs over the forecast. Staff recommended setting aside $10 million ongoing to hedge uncertainty tied to federal/state program changes that could shift costs to the county.
The board voted unanimously to receive and file the update and directed staff to return with the recommended budget for adoption in June.
What happens next: the administration plans to publish the recommended budget book to the public on May 19 and to return to the board with a recommended adoption item on June 9.
Why it matters: the package balances near‑term opportunities to invest one‑time funds — including targeted support for re‑entry services, development‑assistance staffing, and an animal‑shelter operating allocation — with explicit planning to address forecasted structural shortfalls in later years.
