Alameda County Budget Work Group Special Meeting – March 17, 2026

The Board of Supervisors Budget Work Group (Supervisors Halbert and Tam) convened a special meeting on March 17, 2026, to receive an economic outlook, a state budget forecast, and a panel of state‑level experts on the impacts of federal and state policy changes on county services. The meeting also included an update on Alameda County’s current budget and a timeline for the FY 2026‑27 budget adoption.

Economic & State Budget Outlook

Rasley Tadeo (County Administrator’s Office) presented key economic indicators for Alameda County:

• January 2026 median home price: $1.12 million (down 5% from December, down 2.6% year‑over‑year).
• January home sales down nearly 40% from December, up 2% year‑over‑year.
• Unsold inventory up 115% from December, down 13% year‑over‑year.
• Median days on market: 17 (down 10.5% from December, flat year‑over‑year).
• Foreclosure filings up 32% year‑over‑year (11th straight month of increase, but below historic peaks).
• February 2026 jobs report: loss of 92,000 jobs (vs. 126,000 gained in January; economists had expected +60,000). Unemployment rate 4.4%.
• Tech layoffs: Amazon cut 16,000 jobs globally (750+ local); UPS 30,000; Workday cut 150 East Bay jobs; Block cut 40% of workforce (4,000 employees).

The presentation stressed that nearly two‑thirds of the county budget comes from state and federal sources, and that the county faces rising costs, increased service demands, unfunded mandates, and limited ability to raise revenue.

Panel Discussion: Federal & State Policy Impacts on Counties

A panel of experts from state associations provided an overview of current challenges and anticipated impacts. Key points from each panelist:

• Carlos Marquez III (California Welfare Directors Association):

  • HR1 will require county eligibility workers to manually process exemptions and compliance for 2.8 million ACA expansion Medi‑Cal enrollees and 950,000 CalFresh recipients.
  • The state’s harm‑reduction guidance (December 2025) is unfunded.
  • Counties are exploring reclassification of work functions, data‑sharing agreements, and CalFresh employment programs, but nothing is funded.
  • The remaining complex cases (often homeless, lacking data footprint) are at highest risk of losing coverage.

• Laura Lane (California Association of Public Hospitals):

  • HR1 makes the most consequential federal Medicaid cuts in a generation, shifting costs to California and public hospitals.
  • Public hospital systems face a structural deficit of $1.5 billion annually from low Medi‑Cal rates.
  • Additional hits: $150 million from changes to UIS coverage; $827 million if the 1115 waiver is not renewed in 2027; $500 million from new eligibility burdens.
  • By 2032, annual losses could reach $5 billion across California.
  • Patients losing coverage will still show up, sicker and more expensive, increasing uncompensated care costs.

• Michelle Gibbons (County Health Executives Association of California):

  • HR1 is “taking the air out of every room.”
  • Indigent care programs (dismantled after ACA) will need to be rebuilt. State cost estimates: $2 billion to $5.5 billion for counties if 1.4 million people fall off Medi‑Cal (using a one‑third attrition assumption).
  • State redirections of 1991 health realignment funds have slowed revenue growth (from 52–53% to 17% annually), compounding the gap.
  • Public health funding is in a “neglect, panic, repeat” cycle; COVID‑era funding is expiring, and federal grants are being terminated early, threatening communicable disease capacity and IT systems.

• Michelle Cabrera (County Behavioral Health Directors Association of California):

  • County behavioral health is a safety net with health plan responsibilities, funded by state sales tax, vehicle license fees, and the millionaires’ tax (MHSA).
  • Proposition 1 will require Alameda County to cut $53 million in existing mental health services (prevention, wellness, peer programs) to fund housing rental subsidies.
  • New initiatives (e.g., mobile crisis) are at risk: the state proposed shifting the $168.8 million mobile crisis benefit to counties – a “pennywise, pound foolish” move that could increase deaths by suicide.
  • HR1 will cost county behavioral health $224 million in FY 2026‑27 (27,000 individuals losing coverage) and $828 million in FY 2027‑28 (89,000 individuals).
  • Counties are being asked to “do more with less” while facing new reporting requirements and data demands.

• Graham Knaus (California State Association of Counties):

  • The current “unparalleled” attempt by federal and state governments to shift costs and responsibilities to counties is worse than any period since 1999.
  • HR1 alone represents a $6–9.5 billion annual cost shift to counties – not mentioned in the January state budget proposal.
  • No county can mitigate HR1’s scale; even Santa Clara County’s sales tax measure covers only a third of its deficit.
  • Loss of revenue harms not just the poor but also the insured, because hospitals lose the revenue that keeps doors open.
  • The state must step up, and counties need flexibility to achieve outcomes without prescribed methods.

Alameda County Budget Update

Rasley Tadeo presented the current FY 2025‑26 approved budget:

• Total: $6.1 billion (balanced).
• General Fund appropriations: $4.3 billion (increase of $300 million from FY 2024‑25).
• Workforce: nearly 10,500 FTEs (increase of 10 FTEs).
• Largest expenses: salaries & benefits ($1.7 billion, ~40% of General Fund).
• Largest program areas: health, public protection, public assistance (each over $1 billion).
• State and federal revenue: nearly two‑thirds of the General Fund.
• Discretionary revenue: only 30% of General Fund; 75% of that is property‑tax based.
• The county receives only 15¢ of every property‑tax dollar; since FY 1992‑93, ERAF shifts have diverted $11.5 billion in property tax revenue from the county.
• Current year funding gap: $105.7 million; total gaps closed since ERAF: $2.6 billion.
• Long‑term obligations: over $800 million in unfunded capital and major maintenance needs; risks from ballot initiatives, labor negotiations, rising insurance costs, litigation, and economic downturn.

Public Comments & Testimony

• John Lindsay Poland (American Friends Service Committee):

  • Urged the county to revisit the maintenance‑of‑effort budget assumption and the Pabu consent decree (which requires 240+ sheriff’s jail staff, never fulfilled).
  • Noted that jail costs are much higher than community care.
  • Requested that the county’s CIO and behavioral health agency plot out how to fund services for 30 years in new BCHIP facilities being constructed.
  • Asked for presentation materials to be posted online before meetings.

• Online speaker (unincorporated area resident):

  • Stressed that the unincorporated area is chronically underfunded and lacks municipal representation.
  • Urged the county to treat the unincorporated area like a city when allocating funds.
  • Called for a community budget input process to prioritize services amid cuts.

Key Outcomes

• The board and staff heard the panel’s analyses and public comments.
• Supervisor Tam noted that the unincorporated services committee will work with the CAO’s office to present budget information to municipal advisory councils and gather input.
• Supervisor Halbert requested that future budget presentations include year‑over‑year changes in revenue sources (growth/decline).
• The CAO’s office outlined the budget adoption timeline:
  • April 14: Early budget work session with the Board of Supervisors.
  • Week of April 20: Next Budget Work Group meeting to review projected funding gap.
  • May 28: Proposed budget presented to the board (accelerated from previous years).
  • Mid‑June: Budget hearings.
  • End of June: Final adoption.
• The board directed staff to continue community engagement, especially for unincorporated areas, and to refine the presentation materials for transparency.