Halfway through the 2025-26 fiscal year, financial pressures are building on the Riverside County government budget, in which a $38 million deficit will require the attention of the Board of Supervisors during its meeting Tuesday.
The Executive Office published its 38-page “Midyear Budget Report” on Friday, showing that, despite some unexpected modest revenue growth, multiple agencies were in need of additional appropriations to keep red ink from running over before the end of the 2025-26 fiscal year in June.
“Escalating service delivery costs, labor cost increases and the critical need to repair or replace aging facilities are placing upward pressure on expenditures,” according to the budget report. “These cost demands are outpacing available discretionary revenue growth and are further compounded by uncertainty related to federal funding and the governor’s `May Revise’ to the state budget.”
The matter will be the subject of a public hearing before the board Tuesday morning.
According to figures, the $38 million shortfall stems from mounting cost obligations that the following county agencies are unable to meet: Department of Public Social Services, District Attorney’s Office, Office of the Registrar of Voters, Riverside University Health System and Sheriff’s Department.
The Executive Office is asking the board to satisfy about two-thirds of the deficit by drawing down General Fund reserves. The remainder of the hole would be plugged with the agencies’ reserve accounts, according to documents posted to the board’s agenda.
Despite the current financial gap, the report indicated revenue streams had expanded in a few places, principally property taxes, which increased nearly $19 million above the amount first projected at the outset of the fiscal year in July. That will translate to a 3% rise in discretionary income — $1.35 billion instead of $1.31 billion — by the end of 2025-26 on June 30, officials said.
Even if the board shores up the agencies contending with overages, the county’s composite reserves should reach just shy of $700 million at the end of 2025-26, compared to $655 million at the beginning, figures showed.
The board formally approved the 2025-26 budget, totaling $9.98 billion, on June 24. The supervisors further approved a tentative hiring freeze for most agencies to put the brakes on deficit spending.
Payrolls continue to consume half of outlays. The county employs 25,632 people on a regular or rotating temporary basis
More than two-thirds of the county budget is composed of programmed spending, including federal and state earmarks for specific uses, along with grants and related external source revenue. The board has little control over those dollars.
Hearings on the 2026-27 fiscal year recommendations for all county agencies are scheduled for the second week of June, followed by tentative adoption of the new budget on June 23.