Is San Diego County’s budget in trouble — and if it is, whose fault is it?
It depends on whom you ask.
Competing narratives have formed about the future of county finances, with Democratic supervisors arguing the county’s budget is fundamentally sound even as the Trump administration has saddled it with new costs.
To their Republican colleagues, Democrats are leading the county into a fiscal crisis by adding too many new programs and staff without a plan to fund them in the long term.
The different visions come as the Board of Supervisors is set to finalize a record $9.16 billion county budget on June 25. The package grows spending by $523 million compared with the previous fiscal year and adds a little more than a 100 new positions to the county payroll.
At the city of San Diego, officials have tried to solve an intransigent budget crisis with unpopular new fees and cuts, and with a second-home tax — rejected by voters this month — that could have brought in between $9 million and $21 million in new annual revenue.
But county government is fundamentally different from the city’s, and so too is its funding. The county budget is focused heavily on public health, social services, jails and infrastructure for the region’s far-flung unincorporated communities, and nearly half of its revenue comes from the state and federal governments. Most of the city’s comes from local taxes and fees.
“Counties are in the middle of state and city,” said Justina Jose, a professor of public finance at San Diego State University. “They have more responsibilities, but they don’t have as many revenue-generating powers as the city.”
Democratic supervisors have maintained that the county’s finances are strong and not at risk of veering into a crisis.
“The county budget has been healthy, and it will continue to be healthy,” Democratic Supervisor Monica Montgomery Steppe said in an interview. “We will be able to help many more people, and that in and of itself is a return on investment of public dollars and public funds.”
Still, this year’s budget taps a considerable amount of one-time funding for ongoing expenses. The county has yet to determine how the county might cover those costs in the long term.
The budget uses $68.4 million in one-time reserves to cover new costs associated with a federal overhaul of social services programs like food stamps and Medicaid. Millions in other one-time funds are being used to cover new expenses in public safety agencies, support for the arts and more.
Questions about how such programs, especially social services, will be paid for in the long run are driving uncertainty about the county’s fiscal future, Jose said.
“It is stable,” Jose said of the county’s budget. “But it seems like there are too many uncertainties to work with.”
Republican Supervisor Joel Anderson agrees the county’s budget is stable for now but worries an over-reliance on one-time funds will push the county into crisis. “That’s going to catch up to us,” he said.
The expected approval of the county’s budget later this month won’t end the political fight over the county finances.
In November, voters will consider a ballot measure that would raise the sales tax rate by a half-cent countywide.
The surcharge was placed on the ballot by a coalition of county labor unions and social services nonprofits that anticipate it would bring in $360 million in new revenue in its first year. Most of it would be earmarked for social services and projects to mitigate the sewage crisis in the Tijuana River Valley.
Republicans have promised to wage a counter-campaign, with state Assemblymember Carl DeMaio and his conservative advocacy group Reform California already pledging $1 million to fight the measure.
Unprecedented uncertainty
Democrats blame the county’s budget troubles on the Trump administration — and to be sure, Republican-led federal legislation is driving new costs for the county more than any other factor.
Last year, Republicans in Congress overhauled rules and cut spending for social services programs such as Medicaid and food stamps. County Democrats vowed not to let county services deteriorate as a result — but it has come at a cost.
The county’s budget calls for hiring 122 new staffers to administer new biannual eligibility checks for the Supplemental Nutrition Assistance Program, known as CalFresh in California. To cover those new positions, the county will spend $23.7 million in one-time reserves. Those funds were made available by a policy change passed by supervisors last year to unlock hundreds of millions of dollars in reserves to spend at the discretion of supervisors.
An additional $44.7 million in reserves will go to administering new eligibility checks and work requirements for Medicaid, or Medi-Cal in California.
These policy changes point to a fundamental flaw with how counties work, said Graham Knaus, CEO of the California State Association of Counties.
The federal and state governments decide what services counties have to provide — but they apply a “one-size-fits-all” approach to how counties must implement those priorities.
“County government is efficient,” Knaus said. “But the manner in which we’re able to deliver services is dictated by those who aren’t in our community.”
The new costs imposed by the federal government helps obscure another reality, however: Even prior to recent sea changes at the federal level, the county still faced budget gaps.
Last fiscal year, the county faced a $139 million budget gap between how much departments and agencies requested and how much revenue was coming in — prompting it to slash vacant positions and gut its funding for infrastructure projects in order to balance its budget.
This year, that figure grew to $189 million.
Before the second Trump administration, the county already had to contend with inflation, rising retirement costs and new programs created by both the state and the Board of Supervisors, said Joan Bracci, the county’s chief financial officer.
At the same time, she said, other state and federal revenue — along with the region’s diverse property tax base — kept the county’s revenue rising steadily.
For now, the impact of the federal legislation known as H.R. 1, or the One Big Beautiful Bill Act, dwarfs all those factors in how it has crippled the county’s ability to ensure revenue can keep up with services.
But other unknowns are on the horizon, too — like how the county will pay to replace the aging Vista Detention Facility, and future legal costs from lawsuits alleging decades-old child abuse by county staff, Bracci said.
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The county currently has no plan to pay for a new Vista jail, and Sheriff Kelly Martinez said last year that the massive project could cost $950 million if work began immediately.
The county also faces dozens of lawsuits from people alleging sexual abuse at the hands of staff, made possible by a new state law that reopened the statute of limitations for alleged sexual assault victims to sue public agencies.
Last year, Los Angeles County inked a $4 billion settlement over a crush of similar lawsuits it faced.
“We are facing levels of uncertainty we haven’t seen before,” Bracci said.
Republicans acknowledge that some fiscal challenges are out of the county’s control. But simultaneously, they point out that Democrats continue to add and expand new programs amid considerable uncertainty.
Republican Supervisor Jim Desmond points to recent efforts to add about $2 million in new, ongoing spending on arts programs. The upcoming budget also proposes to expand a program to pay for the legal defense of immigrants detained in federal facilities from $5 million to $13 million.
Beyond that, Democratic supervisors have moved to add more new spending for tenant legal aid, an inspector general for the Sheriff’s Office and a new office to promote movie production in the region.
“We’re getting away from the core functions of the county and having these pet projects basically erode our general fund,” Desmond said. “The leadership of the county have been pushing more towards these feel-good programs that we just can’t sustain.”
Mark Kersey, head of the San Diego County Taxpayers Association, worries these trends could send the county into a budget crisis comparable to the city of San Diego.
“There needs to be serious discussion at the county building, just like there does at City Hall, about what is the proper size and function of the county, and how do they right-size that to match the revenue that they’re bringing in?” Kersey said.
Those are “valid concerns,” said Democratic Supervisor Paloma Aguirre. But Aguirre pointed to how the county continues to keep hundreds of millions of dollars in reserves for emergencies or economic downturns.
“In no shape or form are we digging ourselves in any hole,” Aguirre said. “What we’re doing is using the amount of reserves that we have accumulated over the decades back into essential programs.”
Democratic Supervisor Terra Lawson-Remer, who gave birth to her second child in recent weeks, was not available for comment.
Supervisors flex influence
As budget talks continue, Democratic supervisors have worked to exert more control over county finances in unprecedented ways.
Last year, Lawson-Remer and Montgomery Steppe formed a subcommittee to get more involved in the county’s long-term fiscal planning.
Traditionally, the county’s budget is drafted by staff, then turned over to supervisors for amendments and approval. But with the subcommittee, supervisors are getting more involved in drafting the budget on the front end.
Their input on the budget has included directing staff on how to spend county reserves. In an interview, Montgomery Steppe said the panel also told staff to ensure the budget included enough new staff positions to process social-services eligibility checks.
The supervisor defended her panel’s involvement a process customarily done by civil servants. Often, she pointed out, staff’s internal budget decisions veer into the realm of policymaking, which supervisors control.
“We should have a say in that,” Montgomery Steppe said. “That’s why it’s important for us to have a little bit better look behind the veil so we can better opine on them.”
In recent weeks, Lawson-Remer and Montgomery Steppe have touted their subcommittee’s work on finding cost savings for county government. Among the policies the panel has proposed and gotten the full board to pass are ones to reduce the county’s fleet of vehicles and discontinue the use of dated technology such as fax machines and desk phones.
Those savings have not yet materialized but will likely be seen over the coming year, said Bracci, the CFO.
But the role of subcommittees has opened a political fight between Anderson and his Democratic colleagues.
Under county rules and state law, the subcommittee is allowed to operate out of public view, since it doesn’t consist of a majority of the five supervisors.
In February, The San Diego Union-Tribune filed a records request asking for the subcommittee’s agendas and minutes. The offices of Lawson-Remer and Montgomery Steppe still have not responded to that request.
What little is known about the subcommittee has emerged from public announcements by the supervisors and from county finance records, which show it has spent taxpayer money to hire consultants to advise the county on its budget.
In recent weeks, Anderson has introduced legislation that would require subcommittees to publicly post their agendas, minutes and recordings of their meetings and internal memos.
At a meeting on Tuesday, supervisors deadlocked on whether to pass his measure, with Lawson-Remer not in attendance to cast the deciding vote. A fresh vote on the policy is slated for later this month.
Montgomery Steppe said she doesn’t intend to establish a broader policy governing subcommittee transparency. Rather, she wants transparency and disclosure rules to be established only when a new subcommittee is created.
In an interview, Anderson called opposition to his legislation “pathetic.”
“There’s no transparency in that committee,” Anderson said of the fiscal subcommittee. “They’re using that committee to circumvent coming to the board.”
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