Here’s what Sonoma County leaders are saying about the proposed state budget

For the first time in about a decade, California’s proposed budget is taking shape with a range of likely cuts meant to cover the state’s projected $22.5 billion deficit.

The gap — a jarring fiscal pivot after years of surpluses in Sacramento, including last year’s record budget — could mean less funds available for Sonoma County programs that rely on state money.

The region’s state legislators and budget experts say it is too early to say exactly how the state budget will impact the county. They don’t consider the current projections to be dire.

“We are committed to continuing to provide needed services to the best of our ability and at this point, I don’t see the sky as falling,” said Peter Bruland, a deputy Sonoma County administrator who serves as the county’s budget chief.

Gov. Gavin Newsom’s proposed $297 billion budget for the 2023-24 fiscal year needs to balance a shortfall largely driven by decreased tax revenue, as capital gains slump from the state’s wealthiest residents.

Most of the proposed cuts would affect one-time funding sources, not ongoing programs, said state Sen. Bill Dodd, D-Napa, and Sen. Mike McGuire, D-Healdsburg.

“I think the vast majority of Californians and Sonoma County residents won't see a significant impact to their daily life with the current downturn in California's budget,” said McGuire, the Senate majority leader. “The bottom line is this, the Golden State has planned for this downturn.”

Newsom has said the state would not tap into its cash reserves, including a voter-approved rainy day fund, citing the need to preserve that cash in the event of a deeper downturn.

Dodd assured that funding for essential state-funded services would remain intact, including schools, homeless programs and Medi-Cal.

“I really feel confident that funding is going to be there,” Dodd said.

Newsom’s proposal maintains $844.5 million for health care access as well as spending on homeless services, which in 2022 totaled $10.2 billion, continuing an unprecedented pandemic-era surge of spending on housing and outreach on the local level.

Dodd and McGuire touted the $128.5 billion budget for K-12 education programs, including the $23,723 per pupil spending, and 5% increase for the California State University system, including Sonoma State.

However, proposed cuts to climate funding have raised alarms for climate advocates.

Newsom’s proposal reduced climate spending from $54 billion over five years — adopted last year — to $48 billion over five years.

McGuire, whose district runs along the North Coast from the Golden Gate to Oregon, said he was focused on ensuring climate cuts are addressed and funding restored to “invest in coastal and climate resiliency.”

Newsom’s plan also outlines an additional $3.1 billion in cuts for climate and transportation if state revenue projections don’t improve.

Local officials have also objected to proposed deferrals of about $550 million in grant money to bolster rural broadband networks.

“We have huge need in Sonoma County and throughout the North Coast — some of the most underserved and unserved communities in America in our own backyard,” said McGuire. “I fought tooth and nail to secure these funds and that is going to be a real significant focus for us in the coming years.”

Some of the shifts in one-time funds could have implications for local governments, which often rely on such money to launch major projects like expanded broadband service for far-flung communities.

“Where you see one-time things, whether that's on housing or on broadband, it is less money that is available for local jurisdictions like us in many cases to receive,” Bruland said.

Where income taxes serve as a key revenue source for the state, property taxes are a crucial funding source for counties. Rising interest rates and dwindling home sales will have an impact for Sonoma County, said Bruland, but those effects may not be fully realized until future years.

“I think that what we’re seeing in the state and what we’re seeing in our own budget is that this is a year for caution,” Bruland said.

He added, however, that current forecasts are nowhere near as foreboding for public budgets as the Great Recession. At that time the county cut more than 500 filled and unfilled jobs and a total of about $100 million in general fund spending, the main source of support for public safety and administrative departments.

“It’s not 2008 all over again,” Bruland said.

In November, county budget officials projected a $1.6 million surplus in Sonoma County’s general fund, made up primarily by property tax revenue.

Outside of the county’s projected $607.6 million general fund, state and federal dollars support several key county departments including Health Services and Human Services, which receive the largest share of state funding.

As they prepare for budget hearings in the spring, county departments are analyzing their needs and looking through specific line items in the state’s projections to see where funding cuts might impact specific programs.

Dodd said he expects the state’s budget will look different come May as negotiations in Sacramento get underway.

“We will see a much different picture by the time that the (May) revise comes,” said Dodd. “We'll see how much more tax money is coming through the door and just where our problems may lie.”

Dodd said he did not think that the state was locked in a more concerning structural deficit, noting California has had a larger budget over the past two years because of federal pandemic-era aid.

“We were able to get out a lot of one-time money,” Dodd said.

A bright spot in the proposed budget is the allocation of $3 million for State Parks to oversee about 765 acres of the 945-acre Sonoma Developmental Center.

“This will help ensure the open space at Sonoma Developmental Center site is properly protected and managed by the California Department of Parks and Recreation,” County Administrator Sheryl Bratton said in a written statement.

Bratton, who is leaving at the end of January, thanked Dodd and McGuire for championing the allocation.

Sonoma County is expected to hold budget workshops in April before its scheduled June hearings.

You can reach Staff Writer Emma Murphy at 707-521-5228 or emma.murphy@pressdemocrat.com. On Twitter @MurphReports.