Facing increasing costs and revenue that’s struggling to keep up, the Santa Barbara County Executive Office is recommending that the county allocate funds that will maintain current services and avoid expansions.
“Our theme this year is prudence and progress,” County CEO Mona Miyasato told the Board of Supervisors during the April 9 budget workshops. “We are consistently trying to adapt to legislative and state budget changes; we are facing greater labor costs, insurance rate increases; and the cost of doing business is always increasing at a faster rate.”
The workshops are held every April for the board to see the preliminary budget and the requests made by various departments funded by the county’s general fund—including public safety, community resources and public facilities, and health and human services. The recommended budget will go back to the board in May and be finalized by supervisors in June.
“There’s slowing growth in our general fund revenue,” Miyasato said. “High growth and other costs are always challenges to be competitive in salaries and benefits. Those costs never go down. We are trying to keep up, be competitive, and retain and recruit the best we can.”
The CEO’s office projects the county’s 2024-25 preliminary operating budget to total $1.59 billion—a 6.7 percent increase compared to the 2023-24 adopted budget, according to the staff report. However, the general fund’s revenue saw only a 3.1 percent increase, totaling $518 million, compared to an average growth of 5.5 percent, because of slowing growth in property tax, sales tax, and transient occupancy tax revenue, according to the staff report.
About $6.6 million set aside from previous fiscal years will balance out the slower revenue, according to the staff report. While revenue is anticipated to rebound in future years, growing operational costs will continue to outpace revenue and ongoing reliance on the funds set aside will be necessary to balance the budget.
“In a sea of greater uncertainty, we are buoyed by our long-term fiscal planning. I’m not recommending any ongoing expansions from the general fund and not recommending one-time expansions beyond our recommended list at this time unless there are savings, reductions, or new revenue to pay for it,” Miyasato said.
The county is still recovering from the major 2023 and 2024 winter storm damages. It sustained more than $100 million in storm damages in 2023 and $17 million in 2024—with the county still waiting to receive federal and state emergency funding allocation for 2024. The state’s budget also faces turmoil, with a projected $37.9 billion shortfall from Gov. Gavin Newsom’s office—while the Legislative Analyst’s Office estimates it’ll be closer to $73 billion, Miyasato said.
“It appears the state budget doesn’t severely impact the county’s budget, but it’s still too early to tell as the Legislature and governor work out compromises in the May revise,” Miyasato said.
However, new state regulations and new legislation may present challenges to local agencies, particularly those that provide health and human services as they receive most of their funding from state and federal sources and only take 7 percent of the general fund ($27.3 million), said Paul Clemente, the county’s budget director.
Voters narrowly passed Proposition 1 during the March primary, which amends the 2004 Mental Health Services Act to redirect 30 percent of funding toward housing for the chronically homeless and issues a $6.3 billion bond to fund housing for homeless individuals and veterans with mental health or substance use disorders.
“The proposed categorical funding requirements of Proposition 1, primarily the reallocation of funding for housing, will potentially reduce funding for mental health services by $9 million, based on initial estimates,” according to the staff report.
Behavioral Wellness Director Toni Navarro told the Sun in a previous interview that this bill could present an estimated 58 percent decrease for outpatient services and a 30 percent increase in the population served.
Senate Bill 43, which passed last year, expands the eligibility for conservatorship or involuntary detention for individuals with mental health and substance use disorders—putting an additional workload on the Behavioral Wellness Department with no additional funding.
According to Behavioral Wellness’ presentation, the department’s working on redesigning planning efforts and assessing the fiscal impacts
“This past year, there were 269 [bills]; 269 weren’t passed but were on the radar,” Navarro said in the previous interview about the state’s mental health legislation. “The double-edged sword is we have a lot of changes to make and things to do. We’re pedaling faster, and across the state we are working collaboratively and doing a good job of identifying what works.”
This article appears in Apr 11-21, 2024.
