![\"\"](\"https:\/\/www.newsbeep.com\/us-ca\/wp-content\/uploads\/2026\/06\/SCC_OfficeBuildings_01_web.jpg\")
County of Santa Clara office buildings in San Jose on March 11, 2021. Photo by Magali Gauthier.<\/p>\nCounty of Santa Clara office buildings in San Jose on March 11, 2021. Photo by Magali Gauthier.<\/p>\n
Santa Clara County has closed its multimillion-dollar deficit while preserving essential services amid one of its most challenging budget years in decades.<\/p>\n
The Board of Supervisors on June 18 unanimously voted to adopt the $14.7 billion budget for the upcoming fiscal year beginning July 1. Despite previously facing a $787 million deficit, the county\u2019s budget keeps\u00a0key safety net services<\/a>\u00a0for homelessness, suicide and violence prevention programs, as well as preserves all public health positions. The county is expanding services in some cases, including four new satellite clinics to provide primary care access in underserved areas.<\/p>\n But the county also had to consolidate services to balance the budget. That includes\u00a0closing three mental health clinics<\/a>\u00a0\u2014 the Narvaez Adult Mental Health Clinic, Central Wellness and Benefits Center Adult Mental Health Clinic and Alexian Adult Narcotic Treatment Program \u2014 while the county expands services through contracted providers when possible.<\/p>\n \u201cThis year\u2019s massive deficit was not a crisis of our own making,\u201d District 4 Supervisor Susan Ellenberg told San Jos\u00e9 Spotlight.\u00a0 \u201cIt was driven by the loss of federal H.R. 1 funding and\u00a0further anticipated reductions from the state<\/a>,\u00a0leaving us with no choice but to make difficult cuts across departments. Even so, we worked deliberately to reduce the impact wherever possible.\u201d<\/p>\n The federal spending bill\u00a0creates $1 billion in annual losses for Santa Clara County<\/a>, slashing funding for things\u00a0such as\u00a0Medi-Cal and food aid<\/a>. Adding to the challenges is the county\u2019s\u00a0slow growth<\/a>\u00a0in property tax revenue, where expenses continue to outpace money coming in.<\/p>\n The county found several ways to close the deficit. This includes\u00a0relocating labor and delivery services<\/a>\u00a0from O\u2019Connor Hospital to Regional Medical Center, after\u00a0maternity services were restored<\/a>. The county is also pursuing better reimbursement rates with Anthem Blue Cross Blue Shield. The county will\u00a0eliminate 668 positions, a majority of which are vacant, while adding 237 jobs.<\/p>\n Board President Otto Lee said an agreement\u00a0with SEIU Local 521 to have no general wage increases for a year has helped the county balance the budget. The union represents more than half of the county\u2019s\u00a024,000-person workforce<\/a>.<\/p>\n \u201cPassing the balanced $14.7 billion budget was beyond challenging,\u201d Lee told San Jos\u00e9 Spotlight. \u201cThe job cuts,\u00a0behavioral health<\/a>\u00a0and drug treatment clinic closures and consolidation of services will affect everyone we serve. We will continue to fight for the resources our community members deserve, and build partnerships across sectors to meet challenges head-on.\u201d<\/p>\n Another critical part of preserving services\u00a0comes from\u00a0revenue generated by\u00a0Measure A<\/a>,\u00a0a five-eighths cent sales tax increase approved by voters\u00a0last November. The measure adds $337 million in annual\u00a0revenue, which the county will use to bolster its hospitals. The county\u2019s hospital system accounts for a third of the county\u2019s annual budget, at\u00a0$4.7 billion<\/a>, and is California\u2019s second largest public healthcare system.<\/p>\n Adam Cole, office executive manager for the Registered Nurses Professional Association, said that although the county did its best to not eliminate any public health positions that were already filled, it is still losing vacant nurse positions.<\/p>\n \u201cWe do have units in hospitals that are already hitting low staffing and finding it hard to fill,\u201d Cole told San Jos\u00e9 Spotlight. \u201cAnd you just can\u2019t profitably cut nurses, because then you\u2019re below minimum staffing \u2014 and we\u2019re getting pretty close to that point.\u201d<\/p>\n Kyra Kazantzis, CEO of the Silicon Valley Council of Nonprofits, said H.R. 1 forced painful service reductions that will be hard to fill by nonprofits.<\/p>\n \u201cThe true human impact of these cuts will emerge overtime, but the warning signs are clear: When prevention and early intervention services disappear, communities and governments ultimately pay a much higher price,\u201d she told San Jos\u00e9 Spotlight.<\/p>\n County Executive James Williams warns Santa Clara County will likely face more revenue losses in the 2027-28 fiscal year due to H.R. 1. The county anticipates a $500 million shortfall that year, $805 million deficit in fiscal year 2028-29 and $930 million shortfall in fiscal year 2029-30. The county will increasingly need to rely on state support in order to fill the gap.<\/p>\n \u201cWe are doing everything we can as a county and a community to mitigate these impacts,\u201d James told San Jos\u00e9 Spotlight. \u201cOur voters stepped up with 2025 Measure A, our workforce stepped up with most employees forgoing raises this coming year and our departments have made deep and painful reductions. But no county can shoulder unprecedented federal funding losses alone. While there remains tremendous uncertainty ahead, we will keep pushing for stronger partnership with the state to protect the essential services our community depends on every day.\u201d<\/p>\n Ellenberg said the strength of\u00a0residents and county workers has been seen through this months-long budget process, including\u00a0employees who provide services despite uncertainty and partners who advocated for preserving services.<\/p>\n \u201cThanks to their commitment, we have stabilized core programs despite unprecedented fiscal pressure, and we remain focused on rebuilding trust, improving performance and aligning our resources with the needs of the residents we serve,\u201d Ellenberg said.<\/p>\n Contact\u00a0joyce@sanjosespotlight.com\u00a0or @joyce_speaks on X.<\/p>\n