SANTA CRUZ >> Santa Cruz County’s 2025 to 2026 budget hearings, where the Board of Supervisors will weigh funding options for its various agencies and departments in the coming fiscal year, will kick off next week with elected leaders slated to first consider one of its most painful and controversial proposals.

The board will receive a presentation from its staff around 9 a.m. Tuesday at 701 Ocean St. in Santa Cruz that outlines the spending plan for its Health Services Agency in what is projected to be a volatile economic environment.

Faced with an $11.1 million decrease in agency revenue, county staff recommends appropriating more than $308 million to the Health Services Agency with the staff total set at the equivalent of almost 659 full-time positions. However, that total represents an overall reduction in 74 positions, almost 12 of which are currently filled, while the remainder are either vacant or vacant limited term roles.

The cuts were first outlined as an informational item for the board in April in which County Executive Officer Carlos Palacios, Budget Manager Marcus Pimentel and outgoing Health Services Agency Director Mónica Morales soberly outlined the county’s challenging financial picture catalyzed by actions at the federal level.

The county’s top budgetary staffers detailed federal public health grants that had been abruptly cut, millions in previously promised reimbursements from the Federal Emergency Management Agency that have yet to come through and billions in spending reductions currently being weighed by Congress that will decimate local safety net programs such as Medi-Cal and CalFresh.

Palacios said he’s never seen “so much uncertainty and chaos at the federal level” during his 38 years in local government.

But despite the public explanation, the proposal prompted a powerful public backlash.

Members of SEIU Local 521 — the county’s largest union — showed up in full force to defend the positions on the chopping block. Many community members also voiced support for behavioral health service providers Mental Health Client Action Network of Santa Cruz and New Life Community Services’ Gemma program, both of which stood to lose their county funding as of April.

In response to the public outcry, the board asked its staff to return at the June budget hearing with potential options for maintaining county funding for these local programs as it prepares to make a final decision.

Additional budget items

In addition to the Health Services Agency budget, the board is set to consider spending for several other county departments and programs within its proposed $1.2 billion budget at its Tuesday meeting.

Other regular agenda items include budgets for the Human Services Department and capital projects. Budgets on the consent agenda — typically not discussed by the board — include the offices of Assessor-Recorder, County Executive Office, Clerk/Elections, County Counsel, General Services and many more.

Budget considerations will continue on Wednesday with the final hearing set for June 10.