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Santa Cruz County holds public hearing on plan to raise constitutional expenditure limit to roughly $50 million
Summary
County staff proposed a permanent $1.5 million increase to the 1979 statutory base that, officials say, would raise Santa Cruz County's expenditure cap from about $30 million toward $50 million; presenters said the change is not a tax increase and would be placed on the ballot if the board refers it and voters approve.
County officials laid out a multi-step plan on July 1 to ask voters to raise Santa Cruz County's constitutional expenditure limit, saying the existing formula (based on a 1979 base amount, population and a uniform inflation factor) risks leaving the county unable to spend revenues generated by new local activity.
Deputy County Manager Modisa Chavez, who led the presentation, said the measure would be a permanent adjustment to the statutory base (raised by $1.5 million in staff analysis) rather than new taxes. "This is not new revenue. It doesn't raise property taxes," Chavez said, explaining that the change would only raise the amount of local revenue the county is allowed to spend under state law.
The county's consultant, Brandon Knee, summarized a public survey of 366 registered voters showing initial support near 70% for an adjustment and rising after education about what the limit does. Knee said top voter priorities included transparency and investment in roads and infrastructure.
Jay Thompson, a resident who spoke during the call to the public, told the board he feared a lack of detail: "Many in our community feel left out of the decisions that could expand county spending authority by 60% or about 20 million bucks," Thompson said, and asked the county to provide itemized drivers of the increase and how much would fund salaries versus capital projects.
Chavez responded by walking through the statutory formula: a small base amount set decades ago is multiplied by a population factor and a statewide inflation factor to yield the annual expenditure limit. Using the county's projected population and the state inflation factor produced an FY27 limit the presenters said is about $30.4 million. The proposed base increase, Chavez said, would raise the computed limit toward $50 million. He told the board the increase would be subject to Auditor General review and would only take effect if referred to the ballot and approved by voters; staff said the effective date would be FY28 if approved.
Multiple public commenters urged sending the question to voters while also asking staff to list specific priorities the revenue would support. Dr. Mary Vanis, speaking for the Santa Cruz Valley Citizens Council, said the council supported ballot referral if the cited purposes reflect local priorities such as water, conservation, and river restoration.
Chairman Fanning framed the discussion in a longer statement: "Minimum is not optimum," he said, arguing the county needs flexibility to maintain modern public safety, elections security and infrastructure standards that did not exist when the formula was written.
What happens next: the board held this public hearing as the first of two scheduled sessions (the next was set for July 8). If the board votes (two-thirds required to refer in the transcript's description) to place a permanent base adjustment on the ballot, the county would complete the financial analysis and submit required materials for Auditor General review before voters decide in a later election.
Sources: county presentation and public comments during the July 1, 2026 Santa Cruz County Board of Supervisors meeting.
