Santa Cruz County officials told supervisors on Sept. 30 that changes enacted in the federal reconciliation bill known as HR 1, recent state budget decisions and the possibility of a federal shutdown will reduce funding and shift costs for health care and food‑assistance programs over the next several years.

Assistant County Executive Officer Elisa Benson opened a panel of county and community partners with a summary of how cuts and policy changes will affect county operations and residents. Human Services Director Randy Morris told the board that the county is one of the public entities required to administer federal programs such as Medi‑Cal and CalFresh and that those programs’ eligibility, renewal and staffing changes will increase county workload and local costs.

The staff presentation identified three overlapping impacts: coverage and eligibility changes that reduce who receives public health benefits; fiscal shifts that move federal shares of eligibility and administrative costs onto states and counties; and operational changes that add new workload for eligibility staff and community partners. Morris said counties nationwide are likely to face repeated budget cycles of growing pressure over multiple years as federal changes phase in.

Health Services Director Connie Moreno Peraza described how reductions to Medicaid financing and to the Affordable Care Act marketplace will raise uncompensated care for clinics and hospitals and widen existing health disparities. She told the board the county’s community health centers, behavioral‑health services and prevention programs face increased strain if current funding streams shrink.

County staff and community partners quantified the local scale in several places during the presentation: the county now administers roughly 78,000 Medi‑Cal cases and staff say about 40,000 of those enrollees are in cohorts likely to be affected by the crosswalk of federal and state changes. The county projects a multi‑million‑dollar reduction in SNAP/CalFresh benefits flowing into the local economy — staff estimated as much as $16.8 million in reduced CalFresh spending in future years — and warned reductions will ripple to food banks, small suppliers and retailers.

Second Harvest Food Bank representatives and leaders from partner nonprofits described steps they are taking to prepare for reduced federal nutrition funding and to absorb rising demand. County and nonprofit presenters said they are coordinating rescue food operations, expanding home delivery points for vulnerable residents, and advocating for additional state funds to shore up local distributions.

Staff asked the board to accept a recommended set of actions to monitor impacts, expand cross‑sector planning and convene partners to identify mitigation strategies. The board voted unanimously to accept the staff recommendations and to direct staff to continue financial and operational analysis, expand partner convenings and return with updates as part of the county’s regular budget process.

Why it matters: County officials said the changes will not be a single‑year shock but a multi‑year trend, increasing local budget pressure while shrinking the federal and state support that have underpinned county safety‑net services. The board and county staff emphasized that addressing the changes will require coordinated action involving health care providers, nonprofit partners and state and federal elected officials.

What’s next: Staff will continue quarterly and budget‑cycle reporting on projected fiscal impacts, convene partner networks to map shared mitigation actions and work with the board on advocacy to state and federal representatives. The county also flagged the risk that a federal shutdown could cause short‑term cashflow interruptions for reimbursements, which staff are preparing to manage.