The Orange County Board of Supervisors Tuesday gave tentative approval to a $10.5 billion budget for the 2026-27 fiscal year, down from the current year’s $10.8 billion spending plan as officials recover from payouts for claims from the Airport Fire and prepare for cuts in programs from the state and federal governments.
Orange County CEO Michelle Aguirre said the county sought 5% cuts from every department as officials “implemented a hiring and expenditure freeze.”
Aguirre said the county receives just 5 cents out of every dollar collected in property tax revenue from the state, “so we are always at a disadvantage.”
Aguirre told the board that the county has been able to avoid layoffs because of a hiring freeze. The county has “more work to do,” she added.
“We continue to monitor the state and federal budgets” for further cuts, Aguirre said.
The county “must be prepared to make additional reductions” if there is a shortfall in state and federal funding, Aguirre said.
“Simply put we have exhausted all resources available, but we are resilient,” Aguirre said.
The county has spent about $133 million settling 1,269 claims from the October 2024 Airport Fire that was accidentally sparked by the Orange County Public Works Department. On Tuesday, the supervisors unanimously approved $22,652,373 to settle claims from 35 families, and $2.75 million for another claim.
The Board of Supervisors signaled hope that District Attorney Todd Spitzer will find a way to keep funding the Orange County Gang Reduction Intervention Partnership, which provides a variety of programs to encourage youths to avoid becoming involved in gangs.
Supervisor Vicente Sarmiento suggested Sheriff Don Barnes consider defer spending $9 million on new equipment.
Board Chairman Doug Chaffee suggested defunding the Office of Independent Review and appeared to have support for that until county officials said that refunding it would take a fourth-fifths super majority.
Chaffee said the Office of Independent Review, which doesn’t have a director, is “a toothless tiger on a leash and the leash goes back to the board.”
Chaffee said the office created in 2019 to oversee law enforcement has lacked any authority without subpoena power.
“It’s been window dressing since I’ve been here. It hasn’t done its job,” Sarmiento said. “All it does is report back to us and that’s all the function it has. I don’t see it providing a real benefit… I’d like to see it come back with some authority.”
Board also approved putting $3.7 million recovered from the corruption case involving former Orange County Supervisor Andrew Do into the discretionary fund for First District. Supervisor Janet Nguyen, who will have to return to the board for approval of how to spend any of the funds.
The general fund budget, which offers the most flexibility, is projected at $5.2 billion, down from the current fiscal year’s $5.4 billion. The remainder of the budget is generally restricted by law, limiting the county’s ability to adjust how those funds are used.
The county does not intend to lay off employees after 314 positions that were vacant have been deleted.
The county expects general purpose revenue of $1.3 billion, $63.6 million more than the current budget. That’s mostly due to a $57.6 million increase in property taxes.
Officials expect 4.5% growth in general fund property tax revenue over the current fiscal year.
The one-half cent public safety sales tax revenue is projected to be $439 million, which is a 2.7% increase, or $11.4 million, compared to this fiscal year.
Proposition 172 sales tax revenue allots 80%, or $351.2 million to the Orange County Sheriff’s Department, and 20%, or $87.8 million to the District Attorney’s Office.
Revenue from the state for “realignment” is projected at $890.6 million and includes $642.3 million for public safety and social services, $237.4 million for health, mental health and social services and $10.9 million for juvenile justice. That revenue is down 5.7%, or $53.9 million over last year.
Overall, the county is expected to spend $253.2 million less compared to this year.
The supervisors expect to vote on the final version of the budget June 23.