Yolo County faces $39M budget deficit. Here’s officials’ plan to balance funds

The Yolo County Board of Supervisors unanimously approved Tuesday a recommended budget that balanced its nearly $39.6 million deficit in part by “unfunding” dozens of vacant positions, dipping into earmarked reserves for the first time in 10 years and cutting contracts.

Property tax revenues have not kept pace with increasing expenses from inflationary pressures and high cost for labor and materials, Yolo County’s Chief Administrative Officer Michael Webb said during Tuesday’s Board of Supervisors meeting. Uncertainty of money from state and federal sources also squeezed the county’s budget, he said.

Tuesday’s vote approved a $758.2 million recommended budget ahead of its fiscal year, which begins July 1. But staff and elected officials may change allocations in the coming months ahead of adopting an official plan in September.

Supervisors approved unfunding 57 vacant jobs to bypass paying salaries, but also added two employees, totaling to a net reduction of 55 roles. The wages for these positions are recommended to be cut for this upcoming fiscal year, but the jobs are not eliminated from the county’s list of authorized employees it could hire in the future.

“These are challenging times for the county,” Webb said, who added other counties also experience similar pressures.

State and federal dollars account for 43% of Yolo County’s budget. Gov. Gavin Newsom’s administration is grappling with its own $12 billion deficit and President Donald Trump has been cutting federal grants devoted to local organizations through a barrage of executive orders.

The total share of property taxes collected by Yolo County ranks as the second lowest across the state, and the lowest across the greater Sacramento region, according to the county. That funding stream also makes up just 10% of the county’s discretionary funding.

In comparison, property taxes in Sacramento County account for 72% of its discretionary revenues, Sacramento County’s Chief Fiscal Officer Amanda Thomas said during a Board of Supervisors meeting on June 4.

The Health and Human Services Agency, which accounts for the greatest share of the county’s expenditures, is removing funding for 30 positions and cutting about five contracts, said Evis Morales, assistant director for the agency.

The county, for the first time in 10 years, also dipped into three reserves set aside for specific purposes, such as addressing funding gaps in Health and Human Services Agency, Haynes said.

“Our recommendation to use these reserves, I think, really underscores the seriousness of the county’s fiscal challenges,” he said.

However, this money is not from the county’s general reserve funds, which are saved in case of extraordinary circumstances, Haynes said.

Supervisors have the chance to make adjustments to dollars until Sept. 23, when the vote to formally approve the county’s fiscal plan is scheduled to take place.

Haynes added the unfunded positions may have to be eliminated as discussions begin in the coming months to finalize the budget.