Santa Barbara County probably won’t have a “status quo” budget next year, and departments are facing serious cuts.
Health and human services agencies are being hit hard by losses in state and federal dollars, and the county forecasts a $23 million deficit for 2026-27 if it wants to maintain the same level of services, County Executive Officer Mona Miyasato told the Board of Supervisors on Tuesday.
State cuts to CalFresh (SNAP food assistance) and Medi-Cal will have widespread impacts, and several programs have expiring grant funding, she added.
“It’s not just that the safety net is shrinking,” Miyasato said.
She heard someone recently describe it as “somebody punched a hole in it.”
That potential $23 million deficit more than doubles to an estimated $52 million in the following fiscal year, according to the five-year financial forecast report.
“I haven’t seen anything this large since my time at the county, so that’s very daunting,” said Miyasato, who has been CEO since 2013.
“Losses in Medi-Cal coverage are expected to drive clients into the state-mandated but currently unfunded indigent care program over the next two years as more uninsured residents turn to County Health,” Budget Director Paul Clementi said.
The Behavioral Wellness Department has “rapidly increasing costs” for inpatient mental health care, with program costs of $15.9 million last year to serve 125 people.
The number of people placed in institutes of mental disease (IMD) increased 127% over four years, and costs have grown significantly more than the funding, Clementi noted.
Third District Supervisor Joan Hartmann called the forecast “a very sobering picture for our future.”
“With so many mandates, there’s not a lot of wiggle room that we have,” she said.
There will have to be cuts somewhere, Fourth District Supervisor Bob Nelson said.
“Some call it downsizing. I think it’s rightsizing,” he said.
Northern Branch Jail Expansion Construction
One huge expense on the horizon is the Northern Branch Jail expansion, which would add hundreds of beds to the facility near Santa Maria.
Clementi said the county plans to put $50 million down for construction and then pay $8.5 million annually in debt service.
The Board of Supervisors decided to expand the new Northern Branch Jail rather than renovate the aging Main Jail facility. General Services staff are working on the designs now, Miyasato said.
Criminal-justice reform advocates argue for the county to pursue a smaller expansion and commit to more diversion programs to keep low-level offenders out of custody.
“The budget is a choice; you can lock in decades of unnecessary jail costs or you can invest in solutions that reduce harm to the impacted community and reduce costs and reflect our community, the county’s values,” Maureen Earls of Clergy and Laity United Economic Justice said during public comment.
Budget Planning
Departments are developing their budgets now, and the county is considering options to overcome the expected deficit, Clementi said.
That includes a possible sales tax increase, fee increases, reducing or stopping the 18% maintenance set aside for a few years, and a soft hiring freeze.
Workshops are scheduled for April, and the Board of Supervisors will adopt a 2026-27 budget in June.
“A lot of the reason the county exists is to protect people in the most dire circumstances; there will be a lot of things on the chopping block for me before child welfare,” Fifth District Supervisor Steve Lavagnino said.
“We have to be smarter, because the dollars that do exist at the state and federal level need to go further,” Second District Supervisor Laura Capps said.
The county’s pension contribution costs are expected to drop significantly in 2031, when recession-era losses will be fully offset, Clementi said. That could result in pension costs of $30 million less per year, he said.
“That’s something to look forward to and to plan for, but it’s too far out to deal with the revenue and costs we’re anticipating next year,” he said.
