Dear District Five Resident,

Strong communities depend on services that many of us rarely think about until they're needed. Emergency rooms, hospitals, behavioral health services, food assistance, and other essential programs help individuals and families weather life's toughest moments while strengthening our community as a whole.

Today, those essential services are facing unprecedented financial challenges.

On Tuesday, the Santa Cruz County Board of Supervisors unanimously voted to place a temporary one-half cent transactions and use tax on the November 3, 2026 ballot and declared a state of fiscal distress. These actions are a direct response to significant federal funding reductions that are creating serious financial challenges for counties across California.

Why this matters

The federal budget bill signed into law last year dramatically changes how many health and human services are funded. While counties are being asked to take on greater responsibility, the federal government is providing fewer resources to do so. California is working to reduce the impact, but the State cannot fully replace the lost federal funding.

That means local communities like Santa Cruz County are left with difficult choices.

Programs that support health care, behavioral health, food assistance, housing services, public health, and other critical safety-net services are all under increasing financial pressure. These are services that help our most vulnerable neighbors, but they also support the health and safety of our entire community.

When people lose access to preventative care or mental health treatment, emergency rooms become more crowded. Ambulance systems become strained. Public hospitals face greater financial pressure. Families who are already struggling have fewer places to turn. These impacts extend well beyond the individuals directly affected.

What we're facing in Santa Cruz County

We're only beginning to feel the effects.

This year, the County used nearly half of its $43 million in one-time reserves to help preserve critical health and human services. That allowed us to avoid much deeper cuts this year, but those reserves are not a sustainable solution.

Over the next five years, Santa Cruz County estimates these federal funding changes will result in more than $150 million in increased costs and reduced revenues for the County and our community partners.

At the same time, significant reductions to Medi-Cal are expected to leave many Californians without health coverage. Initial estimates suggest approximately 1.1 million Californians could lose Medi-Cal coverage, with that number growing to as many as 3 million by 2028.

Here on the Central Coast, the Central California Alliance for Health projects a 27 percent decline in Medi-Cal enrollment across the five counties it serves. For Santa Cruz County's hospitals, clinics, physicians, and other health care providers, that could mean more than $200 million in lost revenue every year, creating additional strain on a health care system that serves all of us.