County Leaders Raise January Budget Concerns with State Leadership

CSAC is raising county concerns over the 2026 January Budget Proposal directly with legislative leaders and the Newsom administration.

During a recent briefing with the CSAC Executive Committee, California Department of Finance Director Joe Stephenshaw outlined the January Budget Proposal, prompting committee members to emphasize that the proposed budget fails to recognize the real impacts of growing funding gaps on county-delivered services.

“Folks are not seeing what we see on a daily basis,” said Riverside County Supervisor Manuel Perez. “They’ve got to have that concern in the pit of their stomach that we do.”

Stephenshaw’s update came two weeks after the Governor released the January Proposal, which did not allocate funding to backfill gaps created by federal funding cuts in H.R. 1. Committee members reiterated their concern that critical county services were left without clear funding pathways.

“It’s notable to me that you didn’t mention H.R. 1 in this workload budget,” said CSAC President Susan Ellenberg. “H.R. 1 is an absolutely unprecedented change and challenge for all of us. You’re well aware that counties are deliverers of safety net services.”

Stephenshaw explained that the administration is taking a “wait and assess” approach until the May Revise, determining later whether funding can be added for healthcare, homelessness, and other county-administered services.

But counties cannot wait. Earlier this week, CSAC Officers met with legislative leaders in both houses to discuss budget impacts for H.R.1, In-Home Supportive Services (IHSS), Homeless Housing Assistance and Prevention (HHAP), and other programs that depend on predictable and timely state support.

A major takeaway from those conversations, Ellenberg noted, is a growing disconnect between legislative assumptions and the reality counties face. First Vice President Alejo echoed the need for “predictability and sustainability” to continue delivering essential services.

This disconnect underscores the need for stronger state-county collaboration. Counties, as the level of government closest to the people, see firsthand how funding cuts and increasing service demands converge.

While Stephenshaw offered appreciation for counties’ work and interest in better understanding the challenges they face, he did not make commitments regarding additional funding or formal collaboration. CSAC plans to hold the administration accountable to this sentiment. Members are prepared to do the hard work and are urging the state to partner in addressing shared challenges.

“You’re touting we are consistently 4^th or 5^th largest economy in the world, and we should be able to address homelessness and healthcare as basic needs for all of our residents,” said Ellenberg. “We look forward to working with you to pull this all together and strengthen the state.”