Adopted 2025-26 Budget

Adopted Budget Summary

The Adopted Budget decreased staffing to 580.0 full-time equivalent (FTE) positions, including negotiated salary and benefit increases. Appropriations totaled $197,848,007, funded by revenues of $168,329,814, a General Fund Contribution of $26,833,197, a District Sales Tax Contribution of $2,000,000, and use of Other Fund Contributions of $684,996.

Budget Summary

The budget removed and transferred 3.0 FTE Personnel Technicians to Human Resources. Other staffing changes included the 2024-25 mid-year reclassification of 1.0 FTE Administrative Services Manager to 1.0 FTE Assistant Chief of Fiscal Services, and the extension of the following limited term positions for an additional year: 1.0 FTE Departmental Administrative Analyst, 1.0 FTE Social Worker II, and 2.0 FTE Program Coordinators. The budget decreased expenses by $6,548,809 largely from reductions in housing assistance programs, social services substance abuse and employment training.

The budget decreased revenues by $11,043,675 from a reduction of $4.4 million in State funding for housing assistance programs and $1.0 million in Social Services funding for substance abuse and subsidized employment training.

Social Services

The budget for Social Services decreased staffing to 544.0 FTE positions, including negotiated salary and benefit increases. Appropriations totaled $121,514,004 funded by revenues of $115,800,302 and General Fund and Other Fund Contributions of $5,713,702. The budget removed and transferred 3.0 FTE Personnel Technicians to Human Resources.

The budget increased expenses by $875,171 largely from increases of $1,415,805 in year-end carryover, offset by decreases in expenses including $804,950 for the CalFresh Employment and Training program and $596,743 for CalWORKS substance abuse services. The budget increased revenues by $772,316 largely from $1,337,805 in year-end rebudgets, $1,238,116 for Child Welfare to work on a comprehensive prevention plan and $1,117,687 for Adult Protective Services to continue existing work on programs for an aging population, offset by reductions across various other revenues.

Reductions encompassed multiple social services programs. The Social Services division continues work on the Master Plan for Aging, Family First Prevention and Services Act, and CalAIM (California Advancing and Innovating Medi-Cal) implementation.

Entitlements

The budget for Entitlements appropriations totaled $48,746,414 funded by revenues of $31,756,731 and General Fund and Other Fund Contributions of $17,088,682.

The budget increased expenses by $360,530 including negotiated wage increases of $580,000 for In Home Supportive Services providers and an increase of $470,000 in General Assistance payments, offset by reductions in other expenses. The budget decreased revenues by $1,261,607 from reductions in federal public assistance.

Housing for Health

The budget for Housing for Health included a status quo staffing of 20.0 FTE positions, including negotiated salary and benefit increases. Appropriations totaled $21,335,206 funded by revenues of $15,356,794, a District Sales Tax Contribution of $2,000,000 and General Fund and Other Fund Contributions of $3,978,412.

The budget decreased expenses by $7,724,262 largely from reductions in in funded programs like Bringing Families Home, Home Safe, and Housing and Disability Advocacy Program Targeted Strategic Investments, offset by increases of $4,888,367 in year-end carryover. The budget decreased revenues by $10,547,986 largely from a decrease of $4 million for Bringing Families Home, Home Safe, and Housing and Disability Advocacy Program Targeted Strategic Investments (HDAP TSI) in addition to reductions in other state public assistance. The decreases were offset by increases of $4,338,367 in year-end rebudgets. Housing for Health will manage $1.5 million of Collective of Results and Evidence-based (CORE) Investments for Fiscal Years 2025-26 through 2027-28 to support three navigation centers and homelessness prevention services in the southern area of the County.

A District Sales Tax Contribution of $2,000,000, comprised of $1,000,000 from Measure G and $1,000,000 from Measure K, continues to fund 24-hour, service-enriched shelters and transitional housing located in unincorporated areas of the County and staffing and operational support for other housing and homelessness programs, services, and accessible housing for residents struggling with housing stability and homelessness. The Housing for Health division leverages these funds to provide homelessness programs, services and accessible housing for the most vulnerable populations.

Workforce Innovation Opportunities Act/Veteran’s Services/Public Guardian

The budget for Workforce Innovation Opportunities Act/Veteran’s Services/Public Guardian included a status quo staffing of 16.0 FTE positions, including negotiated salary and benefit increases. Appropriations totaled $121,514,004 funded by revenues of $115,800,302 and General Fund and Other Fund Contributions of $791,247.

The budget increased expenses by $60,248 and increased revenues by $6,398 from increase of $269,078 in expenses and revenue from year-end rebudgets. The Workforce Innovation Opportunities Act budget included a $474,337 decrease in funding from the National Dislocated Workers Grant and Regional Equity and Recovery Partnership Grant, which expired and ended the employment training program provided by Goodwill, with a decrease of $453,000 in corresponding expenses.

No significant budget changes were proposed for the Veteran’s Services and Public Guardian budgets.

Supplemental Budget Summary

The Supplemental Budget added $1,137,506 in expenses and $1,137,506 in revenues.

Social Services

The Supplemental Budget included $508,289 for the CalFresh Employment Training (CFET) program, increased funding for 1.0 FTE Benefit Representative position reclass to a Benefit Representative Supervisor, and adjusted appropriations for HSD copy machines.

Staffing changes included the transfer of 1.0 FTE Benefit Representative position from the Employment and Benefit Services division and reclass of the position to a Benefit Representative Supervisor in Administration to assist with Fair Hearings for clients who wish to appeal their eligibility determinations.

Hous for Health

The Supplemental Budget included $219,900 for two contracts funded by the Housing Opportunities for Persons with AIDS (HOPWA) grant, $295,000 for Supplemental Security Income (SSI) applications for Housing Disability and Advocacy Program (HDAP) participants, and $104,534 for the HomeSafe program.

Final Budget Summary

The Final Budget added $5,541,376 in expenses and $4,856,380 in revenues, to rebudget federal and state revenue and associated program expenses and to carryover contracts and services largely for housing initiatives, with the net increase of expenses over revenue funded by the carryover of prior year fund balance.

Federal Impacts: Santa Cruz County faces multiple emerging threats from proposed federal changes to public assistance programs. These proposals could reduce funding, limit access, and impose new work requirements, significantly increasing the administrative workload for Human Services without corresponding resources. For Medi-Cal alone, an estimated 30,000 individuals—over 33% of current enrollees—are at risk of losing coverage. Human Services notes that for every $1 in General Fund, the department leverages $6 in federal and State funding. Up to $140 million in these leveraged funds may be reduced if program eligibility is tightened or existing grants are canceled. These changes may create fear and confusion, particularly among undocumented and LGBTQ+ residents, deterring them from accessing essential services.

In addition, challenges in affordable and supportive housing are intensifying. Santa Cruz County has the highest rental costs in the U.S., and reductions in federal housing investments threaten the completion of critical projects. Over $13 million in grant funding awarded to the County to build and preserve housing is at risk. The lack of long-term rental assistance disproportionately affects seniors, people with disabilities, and low-income workers, worsening overall housing insecurity.

Congress is also considering reauthorization of the Workforce Innovation and Opportunity Act (WIOA), which could result in reduced local funding and diminished program flexibility. More than $4.6 million in funding is at risk due to potential eligibility changes and restrictions on activities that promote diversity, equity, and inclusion. If new limitations on spending are enacted, local workforce programs may struggle to maintain current service levels and staffing.

State Impacts: At the State level, major behavioral health reforms, including the expansion of LPS conservatorship criteria under Senate Bill (SB) 43, the CARE (Community Assistance, Recovery and Empowerment) Act, and Proposition 36, will increase the number of individuals subject to court-mandated treatment. However, no new State funding has been provided to support this expanded mandate. As a result, individuals who meet the criteria for conservatorship or court-ordered care may remain untreated due to limited local resources, posing increased public health risks.

Housing and homelessness programs also face uncertainty, as state investments rely heavily on one-time grants expected to decrease by $6–7 million next year. This funding instability undermines programs such as rapid rehousing for families, older adults, and people with disabilities, making long-term planning difficult.

CalAIM implementation continues to introduce significant changes to Medi-Cal, such as pre-release enrollment for justice-involved individuals and expanded enhanced care management. These initiatives require strong collaboration across agencies and substantial infrastructure investment. However, long-term funding for CalAIM remains uncertain, creating additional pressure on the County’s capacity to fully implement these reforms.

Program Impacts: Locally, several programmatic pressures are emerging. By 2030, one in three Santa Cruz County residents will be over the age of 60, signaling an urgent need to expand and coordinate aging services. Without strategic planning across County departments and community partners, the current system will be unable to meet the increasing demand for services that support older adults.

Within the child welfare system, the child abuse hotline continues to experience high call volumes. Many of these reports, however, could be more appropriately addressed through community-based support services rather than formal investigations. Without public education on when and how to report concerns, the hotline risks becoming overused, delaying response for children in urgent need.

Family and Children’s Services is advancing its prevention efforts through a State-approved plan under the Family First Prevention and Services Act. Despite this progress, implementation is challenged by the lack of a closed-loop referral system and limitations on interagency data sharing. Additionally, funding for this work is set to expire in 2025, and without alternative revenue, the County may struggle to sustain these prevention activities.

Lastly, the County is using a $4.8 million CalAIM investment to develop the BRIDGE Project—a cross-departmental data-sharing system aimed at improving service coordination. While this system has the potential to strengthen collaboration and outcomes, the ongoing maintenance and staffing costs are expected to be substantial, requiring long-term funding commitments to ensure sustainability.