08/05/2026
COMING TO YOUR BALLOT ON NOVEMBER 3RD:
https://www.santacruzsentinel.com/2026/08/04/santa-cruz-county-supervisors-add-half-cent-tax-measure-for-safety-net-services-to-november-ballot/
SANTA CRUZ — With the impacts of federal spending cuts on local safety net services expected to only worsen in the coming months and years, Santa Cruz County leaders will put forward a proposal to voters that aims to soften the blow.
At a special meeting Tuesday, the county Board of Supervisors unanimously agreed to place a temporary countywide half-cent sales tax increase on the Nov. 3 ballot and declared itself to be in a state of fiscal distress. The tax proposal is aimed at safeguarding access to healthcare and other essential local services that could collapse under the weight of funding losses contained within H.R. 1, the federal budget bill that became law in July 2025.
“This is coming before the board because of one reason, and that’s because we have a federal administration that is targeting our vulnerable populations and is attempting to dismantle the Affordable Care Act,” said board Chair Monica Martinez. “We have many residents who ask, ‘What can we do; what can we do to stand up against this federal administration?’ This ballot measure is an opportunity for them to do something. This is an opportunity for our community to step up and say that we support those who are vulnerable in this community. We do not want our safety net to fall apart; we do not want people to fall through the cracks.”
The county estimated that the confluence of cuts to federal programs, ending of subsidies for the Affordable Care Act, heightened enrollment requirements for healthcare programs such as Medi-Cal — California’s Medicaid program for low-income community members — and the shift of administrative responsibilities to local jurisdictions will add more than $150 million in increased costs and reduced revenues to the county and its community partners over the next five years.
The measure, if passed by a majority of county voters, would generate an estimated $27 million of General Fund revenue annually for five years that will be used to keep some of the essential services afloat amid the barrage of funding losses. If approved, the sales tax in Santa Cruz, Scotts Valley and Watsonville would increase from 9.75% to 10.25%, while the rate in unincorporated Santa Cruz County would rise from 9.5% to 10% and Capitola would increase from 9.25% to 9.75%. The tax hike would not apply to groceries, diapers, feminine hygiene products, medications and other essentials.
The measure applies to all four local cities in addition to unincorporated territory because in California, counties are responsible for delivering safety net programs across all local jurisdictions. Even before 2025, County Executive Officer Nicole Coburn explained that the county did not receive the financial support it needed to run these programs, but the federal actions will make the problem exponentially worse.
“These impacts are going to compound over time and are going to impact our entire healthcare system and the safety net,” said Coburn. “These changes will not just stop at the county budget. And I want to reinforce (that) this is going to ripple across the entire local safety net.”
The Central California Alliance for Health, which provides services to Medi-Cal patients in Mariposa, Merced, Monterey, San Benito and Santa Cruz counties, has projected a 27% decline in Medi-Cal enrollment in the wake of federal actions. California, according to a county release, estimated 1.1 million residents will lose their Medi-Cal coverage, while other industry researchers predict 3 million people will lose coverage statewide by 2028.
All told, the county’s provider network as a whole could eventually experience a loss of $200 million each year, according to county staff estimates.
Hospitals will be hit especially hard because as patients lose coverage and forgo preventative care, they stream into emergency rooms, sometimes for issues that should be addressed at a primary care facility or with a specialist. In addition to general congestion and extended wait times, this will be costly to Dignity Health Dominican Hospital in Santa Cruz and Watsonville Community Hospital in Watsonville. Emergency rooms are federally mandated to provide care regardless of the insurance status of patients. So as these facilities provide more uncompensated care, insurance providers and other organizations involved in the continuum of care will look to make up for the lost revenue in other places that are likely to impact rates for those with insurance coverage.
“We’re not taking this opportunity to radically expand services,” said Supervisor Manu Koenig. “This is a moment where the best way to help yourself is, in fact, to help others. Because preserving those emergency services means, ultimately, ensuring that they’re only being used when they absolutely have to be. And that means for our population experiencing homelessness, for people who are high utilizers of the emergency room trying to reduce the number of times that they’re going to the emergency room with preventative care.”
The proposed measure did receive some pushback at the meeting from a few members of the public. Becky Steinbruner, a frequent speaker at the board’s meetings and close observer of its actions, fears the possible increase will hit seniors on fixed incomes especially hard.
“This is a regressive tax that will hurt those people, the very people that you’re saying need the help,” said Steinbruner. “My family has to live within our means and I think the county needs to do the same.”
Should the tax measure pass, the revenue will be funneled into the county’s General Fund, which gives the board some added flexibility to choose how the money is spent as need areas continue to emerge. This also means that there is no requirement for a fiscal oversight committee, but future funding appropriations must be determined by the board through its normal decision-making processes, which includes public hearings and community input.
The board did indicate generally where it will dedicate future resources by adopting written priorities that include emergency medical services and healthcare, mental health and substance use services, food security, housing stability and homelessness response, and other essential services.
“This measure cannot replace the funding that we are expected to lose,” clarified Coburn. “This measure is best understood as triaging the situation. It is not replacement funding.”
Supervisor Kim De Serpa explained that the healthcare network is already under duress, adding that she is one of many local patients who had to switch providers in recent months after a wave of physicians switched networks or departed from practicing in the area due to rising costs and failed contract negotiations.
She argued that the measure is needed to keep the system afloat.
“The county is experiencing a crisis,” said De Serpa. “If there is something that we can do to stabilize people that are the most vulnerable in our population, we must do that. We are a compassionate county.”
The board’s vote is contingent on California Senate Bill 762 which allows various local jurisdictions, including the county, that have already reached their cap on sales tax increases, to exceed those limits by a half-cent. The bill, authored by Sen. John Laird, was approved by the State Senate Monday and will soon head to Gov. Gavin Newsom’s desk.
“This measure cannot replace the funding that we are expected to lose,” said County Executive Officer Nicole Coburn at Tuesday’s meeting. “This measure is best understood as triaging the situation. It is not…
