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August 17, 2022

County budget includes investments in Watsonville

SANTA CRUZ—The Santa Cruz County Board of Supervisors on Tuesday approved the proposed $1.033 billion budget for 2022-23, including a $680.7 million general fund.

The budget represents a $5 million spending decrease from the prior year.

Most notable in this year’s spending plan is the county’s new Public Defender’s Office, which officially begins operation on July 1. That office—for which $15 million has been allocated—was formerly run by Biggam, Christensen and Minslof (BCM), which has provided indigent criminal defense for 45 years.

In addition, the budget includes the county’s new Unified Permit Center, which combines the Planning and Public Works departments. County officials say the move will streamline permitting services and improve customer service. The supervisors unanimously approved the move in February.

The budget also includes funding to improve broadband access for disadvantaged families, and a new apprenticeship program for those interested in public service.

The South County Service Center—which will bring numerous services to Watsonville in the former West Marine building on Westridge Drive—also is receiving funding, as is the Freedom Campus, which is getting a redesign. The center is expected to open in summer 2023.

The budget also includes a 7% increase for the Santa Cruz County Sheriff’s Office and funds to reduce case backlogs in the District Attorney’s Office.

“Despite the challenges of the last few years and the economic headwinds we now face, we are proud of the work we have done on behalf of the community to deliver high-quality, cost-effective services for our residents,” County Administrative Officer Carlos Palacios said.

County spokesman Jason Hoppin says this year’s financial accomplishments include a $5.5 million contribution to Watsonville Community Hospital, which the newly-formed Pajaro Valley Healthcare Project is attempting to purchase in an attempt to bring local ownership and control back to the community.

The county has also begun an affordable housing development in Live Oak.

The balanced budget comes as the county faces budget gaps that could mean a $9.7 million shortfall by the 2025-26 fiscal year, county officials say. Worse, the nation’s economists are forecasting a recession within the next few years, County Budget Manager Marcus Pimentel says.

Palacios says that the county’s financial woes are caused in part by a “systematic underfunding” stemming from five decades of lower-than-average property taxes, which means that Santa Cruz County receives just half of the sales tax per resident as compared to counties of similar size.

County officials say that, if property taxes were collected at the state average, the county would see an additional $128 million in general fund revenue annually.

In addition, the Federal Emergency Management Administration has suggested that the County is only eligible for a fraction of reimbursement for Covid-19 response, possibly leaving it on the hook for as much as $19 million.

The good news, county officials say, is that county voters on June 7 approved an increase to the Transient Occupancy Tax—which is estimated to raise an estimated $2.3 million annually—and changes to the disposable cup fee, which will bring in $700,000 every year to the County’s general fund beginning next year.

The supervisors will consider the budget for final adoption on Sept. 20.

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