Halfway through the 2025-26 fiscal year, financial pressures are building on the Riverside County government budget, where a $38 million deficit was addressed Tuesday by the Board of Supervisors.
“The county financial picture is stable, and discretionary revenue is slightly better than expected,” county Chief Executive Officer Jeff Van Wagenen said during the board meeting Tuesday. “But the cost of county services is growing faster than revenue sources.”
The $38 million shortfall highlighted in the midyear budget report’ stemmed from mounting cost obligations that the following county agencies were unable to meet from the Department of Public Social Services, District Attorney’s Office, Office of the Registrar of Voters, Riverside University Health System and Sheriff’s Department.
In a 5-0 vote, the board rectified the composite imbalance. About two-thirds of the deficit will be reduced by drawing down General Fund reserves. The remainder of the hole will be plugged with the agencies’ reserve accounts, according to documents posted to the board’s agenda.
“We’ll need to approach the upcoming budget cycle with discipline,” Van Wagenen said, pointing to decreases in federal funding for some programs, like Medi-Cal, and the anticipated decline in interest earnings on bonds while financial pressures persist. “Our general fund budget is still not structurally balanced. The reality is, things cost more, and there’s less money to pay for those things.”
On Monday, all county agencies submitted their budget requests for the 2026-27 fiscal year, and the CEO acknowledged higher outlays will be sought.
The midyear report indicated revenue streams had grown in a few places, principally property taxes, which increased nearly $19 million above the amount first projected at the outset of the fiscal year. 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.
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. Van Wagenen attributed the positive shift to the fact that agencies returned a little more money to General Fund coffers than had been predicted at the end of the previous fiscal year.
The board had 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 nearly 26,000 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.
Tax and spend Democrats. A labor force of 26,000 is ridiculous. I have never seen ANY sector of Government who didn’t WANT TO GROW, versus a true NEED.
GET REAL and try leading!