|
Getting your Trinity Audio player ready...
|
Santa Clara County has closed its multimillion-dollar deficit while preserving essential services amid one of its most challenging budget years in decades.
The Board of Supervisors on June 18 unanimously voted to adopt the $14.7 billion budget for the upcoming fiscal year beginning July 1. Despite previously facing a $787 million deficit, the county’s budget keeps key safety net services for homelessness, suicide and violence prevention programs, as well as preserves all public health positions. The county is expanding services in some cases, including four new satellite clinics to provide primary care access in underserved areas.
But the county also had to consolidate services to balance the budget. That includes closing three mental health clinics — the Narvaez Adult Mental Health Clinic, Central Wellness and Benefits Center Adult Mental Health Clinic and Alexian Adult Narcotic Treatment Program — while the county expands services through contracted providers when possible.
“This year’s massive deficit was not a crisis of our own making,” District 4 Supervisor Susan Ellenberg told San José Spotlight. “It was driven by the loss of federal H.R. 1 funding and further anticipated reductions from the state, leaving us with no choice but to make difficult cuts across departments. Even so, we worked deliberately to reduce the impact wherever possible.”
The federal spending bill creates $1 billion in annual losses for Santa Clara County, slashing funding for things such as Medi-Cal and food aid. Adding to the challenges is the county’s slow growth in property tax revenue, where expenses continue to outpace money coming in.
The county found several ways to close the deficit. This includes relocating labor and delivery services from O’Connor Hospital to Regional Medical Center, after maternity services were restored. The county is also pursuing better reimbursement rates with Anthem Blue Cross Blue Shield. The county will eliminate 668 positions, a majority of which are vacant, while adding 237 jobs.
Board President Otto Lee said an agreement with SEIU Local 521 to have no general wage increases for a year has helped the county balance the budget. The union represents more than half of the county’s 24,000-person workforce.
“Passing the balanced $14.7 billion budget was beyond challenging,” Lee told San José Spotlight. “The job cuts, behavioral health and drug treatment clinic closures and consolidation of services will affect everyone we serve. We will continue to fight for the resources our community members deserve, and build partnerships across sectors to meet challenges head-on.”
Another critical part of preserving services comes from revenue generated by Measure A, a five-eighths cent sales tax increase approved by voters last November. The measure adds $337 million in annual revenue, which the county will use to bolster its hospitals. The county’s hospital system accounts for a third of the county’s annual budget, at $4.7 billion, and is California’s second largest public healthcare system.
Adam Cole, office executive manager for the Registered Nurses Professional Association, said that although the county did its best to not eliminate any public health positions that were already filled, it is still losing vacant nurse positions.
“We do have units in hospitals that are already hitting low staffing and finding it hard to fill,” Cole told San José Spotlight. “And you just can’t profitably cut nurses, because then you’re below minimum staffing — and we’re getting pretty close to that point.”
Kyra Kazantzis, CEO of the Silicon Valley Council of Nonprofits, said H.R. 1 forced painful service reductions that will be hard to fill by nonprofits.
“The true human impact of these cuts will emerge overtime, but the warning signs are clear: When prevention and early intervention services disappear, communities and governments ultimately pay a much higher price,” she told San José Spotlight.
County Executive James Williams warns Santa Clara County will likely face more revenue losses in the 2027-28 fiscal year due to H.R. 1. The county anticipates a $500 million shortfall that year, $805 million deficit in fiscal year 2028-29 and $930 million shortfall in fiscal year 2029-30. The county will increasingly need to rely on state support in order to fill the gap.
“We are doing everything we can as a county and a community to mitigate these impacts,” James told San José Spotlight. “Our voters stepped up with 2025 Measure A, our workforce stepped up with most employees forgoing raises this coming year and our departments have made deep and painful reductions. But no county can shoulder unprecedented federal funding losses alone. While there remains tremendous uncertainty ahead, we will keep pushing for stronger partnership with the state to protect the essential services our community depends on every day.”
Ellenberg said the strength of residents and county workers has been seen through this months-long budget process, including employees who provide services despite uncertainty and partners who advocated for preserving services.
“Thanks to their commitment, we have stabilized core programs despite unprecedented fiscal pressure, and we remain focused on rebuilding trust, improving performance and aligning our resources with the needs of the residents we serve,” Ellenberg said.
Contact joyce@sanjosespotlight.com or @joyce_speaks on X.
This story was written by Joyce Chu for San José Spotlight. The original version of this article can be viewed here.
