Six months ago, Santa Clara County voters approved a ballot measure that increased the county’s sales tax rate by 0.625% for five years, after county leaders had warned that cuts in federal Medicaid funds would force drastic cuts to healthcare and other vital county services.
At the time, county officials and proponents of Measure A estimated that the tax boost would generate about $330 million per year to help offset an estimated $1 billion annual shortfall caused by aid cuts in President Donald Trump’s “Big Beautiful Bill” approved by Congress last year.
The county now estimates the impact will be bigger than original estimates.
Even though the new sales tax will generate $337 million this year, the county will still face a $787 million shortfall, mostly in healthcare services, according to county officials.
To balance the $14.7 billion budget that will be discussed by the Board of Supervisors this month, 655 positions will have to be eliminated, the county said.
County Executive James Williams told the media last month that nearly 400 of those positions are vacant, and he hoped to avoid layoffs. The proposed budget, however, does include the closing of two behavioral health clinics.
County supervisors already approved nearly $200 million in budget cuts in February during a mid-year budget review, including cutting roughly 365 positions that were largely vacant, mostly in the county healthcare system.
Controversy over last fall’s Measure A campaign still casts a long shadow over this spring’s budget discussions.
The state Fair Political Practices Commission is reviewing a complaint that claims the county’s descriptive materials before the November vote crossed a line into advocacy for the ballot measure, in violation of state law. A December complaint from the Silicon Valley Taxpayers Association and Libertarian Party of Santa Clara County said the mailers amounted to “political propaganda.”
The county budget proposal to use all of this year’s sale tax funds into healthcare services may not sit well with District Attorney Jeff Rosen and county law enforcement unions, who agreed to support the measure after assurances that the money raised would not be limited to healthcare,
The county is proceeding with plans to open its new behavioral health pavilion on the campus of Santa Clara Valley Medical Center later this year.
The pavilion will include the first child and adolescent inpatient psychiatric unit in the South Bay, and is to be staffed by transferring positions from elsewhere in the county.
The Board of Supervisors will hold three consecutive budget workshops May 11-13, and will hold three more sessions before completing the budget adoption process in mid-June.