Board of Supervisors Agree to Ask Voters to Backfill Federal Cuts With Sales Tax Measure

On Tuesday, the Contra Costa County Board of Supervisors unanimously agreed to move forward with a sales tax aimed at back-filling federal cuts.

If approved by voters, the additional 0.625% Transactions and Use Tax would generate approximately $150 million to support general operations of the County for a period of five (5) years. With Federal and State cuts, the county is hoping to get support of voters to minimize impacts the cuts will have which include:

The passage of H.R. 1 represents a fundamental shift in the relationship between the federal, state and local governments for health and social service programming. In Contra Costa County, this means significant revenue reductions for Medi-Cal (California’s version of Medicaid) and CalFresh (California’s version of the federal Supplemental Nutrition Assistance Program (SNAP)). These impacts are further exacerbated by certain budgetary actions taken by the California Legislature in the fiscal year 2025/26 budget
For Medi-Cal, the County projects that annual revenue losses to increase annually to $307 million by fiscal year 2028/29. This is due to two primary drivers, 1) $159 million from Medi-Cal disenrollment due to changing eligibility criteria, and 2) $148 million from loss of supplemental state and federal healthcare funding. It is important to note that the $307 million figure represents an ongoing, structural budget deficit in the Hospital Enterprise Fund (EF1) that will need to be closed to maintain a structurally balanced budget in future years.
It is additionally noteworthy that the above structural deficit projections do not include the increased costs from negotiations with the County’s labor unions, which are currently in progress, nor does it include an estimated $170 million, one-time capital cost requirement to retrofit portions of the County Hospital for earthquake safety.

It has been previously stated:

H.R.1 imposes numerous reductions in payments to Medi-Cal providers and makes significant eligibility changes which will cause thousands of Contra Costans to lose health coverage. Changes to State Medicaid policy will also reduce funding. Taken together, nearly 100,000 Contra Costans could lose their insurance coverage, and Contra Costa Health will have funding reduced by $300 million by 2029, creating an over $100 million deficit for the Contra Costa Regional Medical Center, which also operates the only psychiatric ward in the County to serve the severe psychiatric emergency medical care needs of county residents.

The law also makes substantial reductions to the Supplemental Nutrition Assistance Program (SNAP) (CalFresh in California), which would increase food insecurity for thousands of Contra Costans.

After the staff presentation and public comments, Supervisor Shanelle Scales-Preston wanted to move forward with the tax measure to assist with services and backfill cuts.

“I think its important,” said Scales-Preston. “We continue to hear about the federal cuts, the state cuts and how that will affect us here in the county as well as the services. It’s important we continue to meet the needs of our community members and making sure those services are available. Backfilling what is happening at the federal level will help fill that need.”

Supervisor Ken Carlson said this needed to be put in front of voters but took issue with folks stating they needed to look within themselves and argued they were. He called on the county to educate the voters on why they need to do this.

“It’s about preserving services and protecting our community,” said Carslon noting they had looked at layoffs and discontinuing programming and finding ways to align it. “It’s a partnership and we are looking at ways to protect services and jobs.”

Supervisor Candace Andersen questioned even if this passes, would the tax revenue take them out of harms way.

County staff responded that it wouldn’t. The current estimate to the impacts of healthcare is approximately $307 million in year 3 which is then an ongoing structural gap and the goal was to allow the county a chance to be in a position to be able to balance the budget. They said the impacts to social services, it helps, but doesn’t close the gap.

“Given this 5-years, some relief, not enough to solve the problem, its going to give us the ability to restructure, to continue to cut expenses to continue to figure out how we are going to be able to move this county forward and provide these essential services to the county residents of our community with reduced funds,” stated Andersen.

Andersen continued noting she did not take any tax lightly, even voting against Measure X but admitted that its helping the community, but would be supporting this and voters needed to decide if this was a priority or not.

“Whatever happens we will have to figure out how to balance our budget and will continue to do so,” stated Andersen. “The reality is there will be people who will be seeing significant gaps in the services they potentially need if we are not available to adjust the revenue.”

Supervisor Diane Burgis confirmed this tax will not fix what they know and then there is also what they don’t know as they continue to see surprises.

“This is not just us working internally to fix and try to protect a system, this is a healthcare system that goes not only across our county, but is also part of a regional system. We know that there are rural counties that are not sure they are going to survive,” explained Burgis. “What we saw during COVID was when there wasn’t services here they were, they came to another place. Not only do we need to make sure that we have the strongest system here for ourselves, we don’t know what other pressures are coming.”

She called it about peoples health and making sure someone can see a physician, get pharmaceuticals and care – people getting services and kids getting fed and seniors getting services.

“It’s about maintaining a whole system that is all connected, including our private care systems,” stated Burgis while adding she supports also going through and cutting the fat from programs and budgets as part of the overall process. “This is about us doing the best we can.”

Supervisor John Gioia said this doesn’t close the gap but minimizes the harm of those who could be cut off from healthcare.

“I’ve spoken to some of the large healthcare systems in the area, and they may be coming out with their positions soon, but they have indicated that a tax like this is very important because they see impacts. I think its important for us to realize that keeping healthcare for all helps everybody, including those who have health insurance,” stated Gioia. “When people drop off healthcare, they show up at our emergency rooms in greater numbers and that impacts everybody. Meaning longer wait times and people get sicker which also costs our healthcare system more. When people delay their healthcare more, that costs all of us.”

He cited higher costs and longer wait times. He said they will continue to advocate at the federal level to reverse some of these policies. He said they will continue to look at making their own operations more efficient. Finally, its about filling the gap to buy time.

The board then voted 5-0 in favor of authorizing a 0.625 general retail transactions (sales) and use tax on the June 2, 2026 ballot.

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