In a special meeting Tuesday, the Santa Cruz County Board of Supervisors will consider declaring a state of fiscal distress and asking voters to approve a temporary half-cent sales tax that county officials say is needed to offset steep federal funding cuts and protect essential public services.
If approved by a four-fifths vote, the board would place a measure on the Nov. 3 ballot asking voters to authorize a countywide one-half cent increase in the transactions and use tax for five years.
County officials estimate the measure would generate roughly $27 million annually beginning in the 2027-28 fiscal year.
County staff says the proposal is a response to what it describes as an unprecedented fiscal crisis driven by recent federal legislation and administrative actions that reduce funding for healthcare and safety-net programs while shifting additional costs onto counties. According to the staff report, Santa Cruz County has already identified about $25.6 million in annual impacts, with more than $150 million in increased costs and lost revenue projected over the next five years.
The board is also being asked to formally declare a state of fiscal distress, citing a structural budget imbalance, rising operating costs and the loss of federal support. The proposed resolution states that the county’s projected General Fund deficit has grown from $23.2 million to $48.8 million and could exceed $67 million in future years without corrective action.
County officials say they have already implemented hiring controls, eliminated vacant positions, reduced spending and pursued operational efficiencies, but those measures alone will not be enough to offset the anticipated losses.
The proposed ballot measure, titled the Temporary Emergency Medical, Healthcare, Food, Housing, and Essential Services Protection Measure, would direct revenues into the county’s General Fund.
While state law prohibits the county from legally dedicating those dollars to specific programs, supervisors are also expected to adopt advisory spending priorities that emphasize emergency medical services, hospitals, mental health care, food assistance, homelessness prevention and other safety-net programs if voters approve the tax.
The urgency ordinance establishing the tax would take effect immediately if adopted Tuesday, but the tax itself would not be collected unless approved by a majority of voters in November.
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The supervisors will meet at 9am on Tuesday in the boardroom on the top floor of the government building at 701 Ocean Street in Santa Cruz.
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No, no and no. No more tax increases.