How did state and federal cuts impact SLO County? See finalized budget savings
AI-generated summary reviewed by our newsroom.
- SLO County closed a $32.6M budget gap by cutting jobs and reallocating funds
- Departments saved $19.1M last year, boosting rollover reserves to $51.8M
- State and federal program cuts drive ongoing risks to health and social services
After accounting for state and federal budget actions and tallying up extra county savings, San Luis Obispo County has officially closed its budget books for the season with some extra money in the bank.
Half of the county’s budget comes from state and federal sources. Faced with a $12 billion state deficit and massive cuts to federal programs, this was not an easy budget year for SLO County.
California cut all funding to homelessness services, and the One Big Beautiful Bill Act majorly reduced funding for Medicaid and SNAP.
All-in-all, the county eliminated around $32.6 million in funding and 155 jobs to avoid a deficit that would’ve grown to $67 million by the end of the decade.
But the county was still able to patch some pain points. The board allocated $2.5 million in one-time support for homeless services to cover the gap left by the state budget and found a way to keep some key county programs open that were originally slated to be shut down.
The county also saved nearly $4 million more from last year than anticipated that will carry over into this year’s budget.
The Board of Supervisors approved the final budget adjustments and savings on Tuesday, which also allowed for the discharge of $3.7 million of bad debt and the acceptance of nearly $40,000 in donations.
The new budget kicked-in at the start of the fiscal year on July 1.
How did federal and state budget decisions impact SLO County?
A report from the county provides a high-level overview of how state and federal budget issues have and are expected to continue impacting SLO County.
California closed a $12 billion deficit this year, partly by cutting all homelessness funding for this year. A $500 million homelessness budget is authorized for next fiscal year 2026-27. The county closed this gap with one time funding.
However, these issues are not isolated to just this year.
In the coming years, the state’s Legislative Analyst’s Office anticipates annual budget deficits ranging from $10 to $20 billion through 2029.
The Big Beautiful Bill also cut $1 trillion from Medicaid and changed the eligibility requirements, which could leave some SLO County residents dependent on the program without healthcare, largely including immigrant populations.
The federal budget bill also eliminated funding to reproductive health nonprofits like Planned Parenthood and cut $186 billion from SNAP and eliminated certain programs entirely, placing financial strain on schools to cover the gap.
The county also faces potential reductions in core emergency preparedness grants in future budget years.
How much money did each SLO County department save?
On final accounting, SLO County ended up with $3.8 million more in its general fund for fiscal year 2025-26 than anticipated, with a total rollover of $51.8 million in general fund savings from fiscal year 2024-25, according to the Year-End Financial Status Report.
The extra funding will go toward storm repairs to the Cayucos Pier, reimbursing the state for cancelled FEMA funding, restoring general fund contingencies and paying partly for the one-time homelessness funding.
The general fund is the largest operating fund for all SLO County departments. It accounts for the majority of the county’s $1.1 billion budget.
Overall, departments saved $19.1 million from last year’s budget — about 5.9% of the budgeted amount, according to the year-end report. It was $5 million more than the year prior.
The most over budget department was the Sheriff-Coroner, which spent $1.8 million more than its budget due to revenue shortfalls and unbudgeted salary and benefits including overtime, according to the report. Sheriff’s Office deputies and sergeants accounted for most of the top overtime earners in 2023.
The only other departments with budget overages were Human Resources — which was $243,822 over budget — and the District Attorney’s Office — which was $40,615 over due to a revenue shortfall.
Some of the biggest savers were County Counsel at $1.5 million under budget, County Fire at $4.8 million — due to Cal Fire contract savings — and the Health Agency at $6.2 million. Probation, parks and recreation, information technology and social services all also saved between $850,000 and $1 million each.
SLO County discharged bad debt and accepted donations
With the approval of the year-end report, the board discharged $3.7 million of bad debt and accepted nearly $40,000 in donations.
The majority of the debt was from the Probation department in unpaid court fines and fees, with another $34,000 from the Department of Social Services for case cleanup, according to the report.
Discharging bad debt is not the same thing as dismissing it, and it does not release the debtor from their legal obligation to pay. It simply relieves the county department from the responsibility of actively pursuing payment.
