Mounting budget shortfalls and uncertain funding challenge efforts to manage County spending.

The County Board of Supervisors are back at the annual Rubik’s Cube – attempting to rightsize the county budget while looking ahead at mounting shortfalls.

At a budget workshop on April 7, the County Administrative Office presented a bit of good news: More money was brought in than expected for fiscal year 2025-26, mainly thanks to property taxes and one-time reimbursements.

But as the budget gets drafted for adoption by July 1, projections show expenditures outpacing revenue significantly over the next three years, with shortfalls of $40.6 million for fiscal years 2026-27, $61.9 million in 2027-28 and $76.9 million in 2028-29.

And that’s if no vacant positions are filled. “If we were to fill up every vacancy, we’d end up at $118.9 million short for fiscal year 2026-27,” County Budget Director Deja Sero said.

Employee costs, pensions and health insurance are cited as the key drivers pushing costs higher each year against slowly growing (and somewhat uncertain) revenue streams.

Department budgets present a mixed picture. Twelve departments are in a deficit in fiscal year 2025-26, with the Sheriff’s Office accounting for over half of that total shortfall at $6.8 million. Meanwhile, 11 departments are in a surplus, including the County Health Department with $2.2 million thanks to a boost from a $1.6 million settlement, and improved reimbursements from the state.

The forecasts are compounded by brewing concerns over reliability of federal and state funds, as well as potential economic downturns on revenue. Disasters, from fires and floods to the Moss Landing Battery Energy Storage Facility fire, have strained funds, pulling from strategic reserves while reimbursements have been slow.

“Departments, with the limited resources that they have, are adjusting their budgets, but also experiencing impacts in terms of some of the grants going away,” Sero said.

How the County will use Measure AA – a voter-approved revenue measure that generates about $26 million per year – remains a source of debate.

District Attorney Jeannine Pacioni’s office is asking for $842,347 in emergency funding to avoid cutting investigator positions. “The attorney positions in my 2026–2027 budget are not wish-list items. They are the bare minimum required for this office to fulfill its statutory duty,” Pacioni said.

The Sheriff’s Office is requesting $755,447 to fund just existing services, which includes funding two vacant positions and ongoing operational maintenance for things like the Flock Safety camera network and Axon Air drone systems. The department is also requesting nearly $4 million to bump the total number of Flock cameras from 60 to 200, launch a one-year pilot program for deputy sheriff recruits and fund new search-and-rescue vehicles.

“We don’t have one-time money available like we have had in previous years because we spent it on ongoing expenses,” Supervisor Wendy Root Askew said.

A week later, on April 14, the board discussed potential revenue-generators and agreed to hire a consultant to look into voter support for a possible ballot measure to increase the hotel tax rate from 10.5 to 12 percent, generating about $5 million annually.