Orange County officials Wednesday released a proposed $10.5 billion budget for fiscal year 2026-27, down from the current year’s $10.8 billion spending plan.
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 expense of legal settlements from the Airport Fire continue to influence how officials budget.
“That’s one of the reasons we’re trying to be more careful and be more restrictive,” Orange County Supervisor Don Wagner said.
The county has a hiring freeze and department heads were asked to cut expenses by 5%. Changes in how the state is funding mental health and homeless outreach services are also affecting the budget, as are cuts to services from the federal government, Wagner said.
Despite those head winds, it could have been worse, he said.
“I’ll give budget staff kudos for that,” Wagner said. “The department heads were looking for ways to make responsible budget decisions going forward in times of strained receipts and they’ve done a good job.”
The county does not intend to lay off employees after 314 positions that were vacant have been deleted, Wagner said.
“There’s zero intent of pink slips,” Wagner said. “At least as of right now.”
“It’s important to note we have made reductions, 5% across the board, including in board offices,” Wagner added. ” … At the end of the day it’s still balanced and we believe we will be able to continue serving the public at levels we have in the past. There will be some federal and state programs that will be cut and we’re scrambling to save them, but the challenges are real and it’s a responsible budget that staff has put forward.”
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.
The property tax increase is “nowhere where it’s been in the past,” Wagner said.
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.
“Sadly, not a lot in the grand scheme of things,” Wagner said.
Prop. 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 publics 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 will consider the proposed budget at their June 9 meeting. It should be voted on for final approval June 23.