San Diego County leaders today warned that while the County has strategically bolstered its reserves and narrowed the gap ahead of next year’s estimated $138.5 Million annual budget shortfall with a $31 Million projected surplus at Q2’s close, the unprecedented scale and uncertainty of federal funding freezes will further destabilize the County’s ability to address our region’s challenges.

At the Board of Supervisors meeting today, acting Chair Terra Lawson-Remer highlighted significant budgetary wins to date in 2025, while acknowledging that Washington’s targeting of Medicaid, housing and emergency programs with severe austerity cuts will have devastating consequences on the area’s ability to provide critical social services and responsibly manage the area’s finances.

Leaders warned that while San Diego County has done well in the face of national and statewide financial challenges,  that no amount of local planning can make up for reckless federal policies that are actively pulling resources away from our communities. The cuts coming out of Washington are real, and they will have direct consequences for the people the County serves.

"The County of San Diego has been smart, disciplined, and responsible with our budget. Our departments have done more with less, our staff has worked to stretch every dollar, and we are closing this quarter in a stronger position than expected," said acting Chair Lawson-Remer. "But no matter how well we manage our finances, we cannot outrun the budget catastrophe being created in Washington. Federal funding cuts, program freezes, and policy uncertainty are actively destabilizing the County’s ability to plan for the future."

The County has skillfully steered the region through a storm this year, but leaders warned of a troubling forecast emerging: The storm, they warned, is poised to grow significantly worse as Washington’s cuts take shape.

Significant Federal Cuts Threatening San Diego Health and Human Services Agency (HHSA) programs:

• Healthcare: Cuts to the $581 Million that San Diego County’s Medicaid program receives from the federal government could affect healthcare access for approximately 900,000 San Diego County residents. Critical federal Medicaid waiver programs, including BH-CONNECT and CalAIM,  fund transitional housing support, addiction treatment, and mental health services. Losing these waivers would jeopardize recent County expansions in behavioral healthcare. 

• Food Assistance: Proposed reductions to CalFresh/SNAP’s $113 Million in federal funding could impact nearly 400,000 low-income individuals and families in San Diego County, including over 130,000 children. 

• Housing & Homelessness: The latest information indicates HUD is set to cut approximately $10 million to $30 million in San Diego County housing voucher funding, forcing the County to reduce or eliminate rental assistance for thousands of low-income households. Without this support, families who rely on vouchers to stay housed face a heightened risk of eviction—fueling an increase in homelessness across the region.

Congressional Republicans and the Trump Administration have made it clear that they no longer want to support efforts to expand mental healthcare and reduce homelessness in San Diego County," said Lawson-Remer. "That means we have to be incredibly disciplined about where we allocate resources, ensuring that every dollar we commit today is preparing us for the funding losses we may face tomorrow."

Supervisor Lawson-Remer warned that the County has a responsibility to tell the truth about what’s happening, and to make sure every decision made reflects the reality of the budget crisis ahead. If federal leaders do not change course, San Diegans need to be prepared for service reductions—because no local government can fill the gaps being created by Washington at the moment.

The County will provide further updates as federal budget discussions continue.