In a challenging fiscal year marked by grim financial forecasts, the Santa Clara County Board of Supervisors recently approved a $12.5 billion budget, effectively eliminating a previously projected $250 million deficit.

The 2024-25 fiscal year budget encountered difficulties early on as labor expenses continued to outstrip revenues. Costs associated with salaries and benefits were anticipated to rise by $488 million compared to the previous year’s budget. However, county officials managed to bridge the $250 million gap through the introduction of new revenue streams and implementing various cost-cutting measures.

Nonetheless, the county anticipates further challenges ahead, including potential funding reductions from the state due to its own substantial deficit. Additionally, the closure of the trauma center at Regional Medical Center and other critical program downgrades are expected to impact the county’s healthcare system.

County Executive James Williams highlighted these challenges, noting, “We are experiencing downstream effects from state and federal levels, compounded by shifts in social responsibilities to local government by private sector entities.” Williams emphasized the county’s commitment to maintain essential services despite these pressures.

The budget outlines several key priorities, including significant allocations for seismic upgrades within the county’s healthcare infrastructure: $40 million for Santa Clara Valley Medical Center and $60 million for Valley Health Center San Jose. Additionally, the budget expands access to mental health services, increases funding for housing for agricultural workers, and enhances investments in sustainability initiatives and programs, among other initiatives.

Despite facing potential elimination last month, Special Olympics Northern California successfully secured the necessary funding to continue its operations in Santa Clara County.

Susan Ellenberg, Board President, expressed relief that the county managed to balance its budget and sustain service levels for vulnerable residents while safeguarding core budget priorities and county jobs. However, she cautioned that challenges lie ahead, particularly with the county projecting a $158 million deficit for the 2026-27 fiscal year.

Ellenberg emphasized the importance of ongoing prudence and collaboration in managing residents’ tax dollars as critical measures for navigating future fiscal challenges.