The budget deficit has ballooned to $38 million in San Luis Obispo County meaning budget cuts are needed to rebalance ahead of the next fiscal year.
“Our revenues aren't keeping pace with our expenses across the board," newly-appointed County Administrative Officer Matt Pontes explained.
Pontes is in his first round of having to deal with the county's budget deficit, which has almost doubled since last year.
“As COVID ended and as those [one-time] funds got more scarce, then it became a little harder to keep up with all the programs and services that were delivering," Pontes said.
Pontes explained there will be cuts across the board, with all departments required to submit a 15% reduction in their annual budget. From there, the county spent time looking into every program to determine where cuts would actually happen.
“This really was a deep dive into those kind of programs," Pontes said. "We spent a lot of time over the last eight months going into each program, really trying to understand the metrics of the program. How many people are we serving? Is there a different way we can serve the people?”
The County has more than 700 programs, and many, especially ones that aren't mandated, will see a reduction in funding.
CAPSLO is one of the non-profits that will take a hit. Child, Youth and Family Services Director Melinda Sokolowski explained that even though they receive 80% of their funding from the federal government, they received a 30% reduction in funding from the county to a program that serves between 300-500 families locally, leaving fewer parent educators and family support services.
“With the loss of this funding, we're either going to be having a waiting list for those services or not be able to provide those services throughout the entire county,” she said.
According to Pontes, the county continues prioritizing funding of public safety, housing, homeless services and overall economic development; however, sectors that could feel greater budget cuts are in public health.
“When public health, behavioral health, Department of Social Services are all taking reductions, it's going to have a greater impact on the community as a whole.”
County staff are also recommending 168 positions across the county be eliminated, many of which were vacant jobs to begin with. However, 48 layoff notices have been issued so far.
“We spend a lot of time trying to understand those impacts to counties and then advocating for less of an impact to the communities that we serve," Pontes said.
Without the cuts, county staff forecasted a $67 million budget deficit by the 2028-2029 fiscal year. That paired with the uncertainty of the state and federal funds that account for 50% of the budget and impacts of reduced budgeting across all departments has now become a crucial piece to rebalancing and creating a resilient county budget.
This week, Governor Gavin Newsom outlined a budget proposal for California. He announced the state is currently in a $12 billion deficit, which could have rippling impacts in the local county budget as well.
Following the budget proposal, the California State Associations of Counties CEO Graham Knaus stated, "California voters have been very clear about their state priorities: reduce homelessness and reduce crime. The budget proposal would not fund either of those priorities. There’s no money in this proposal for successful local efforts to address homelessness, or for counties to implement Prop 36. Counties can’t do this alone. It’s time for the state to honor the voters’ wishes and fund these programs."
The SLO County budget hearings are June 9-11 where the proposal will be presented before the Board of Supervisors.
