State’s budget deficit casts shadow over Fresno County

Midyear 2023-24 budget review indicates Fresno County is facing fiscal challenges amid a projected $38 billion state budget deficit

The Fresno County Board of Supervisors at one of their biweekly convenings.
Darren Fraser
Published March 22, 2024  • 
9:00 am

FRESNO COUNTY – The state’s looming and massive budget deficit has cast a cloud over the Fresno County Administrative Office’s report on the midyear health of the county’s 2023-2024 budget, which was delivered to the Fresno County Board of Supervisors (Board) at its latest meeting, prompting a discussion of belt tightening and surgical job cuts.

The state’s near $38 billion deficit – or $73 billion, according to the Legislative Analyst’s Office (LAO) – was not the only financial harbinger of worry for the county. County Budget Director Paige Benavides, who presented the report to the Board on March 19 with assists from County Administrative Officer (CAO) Paul Nerland, noted that sales tax revenue for the current year was less than projected and will remain flat for fiscal year 2024-2025.

“As we move into the next fiscal year and beyond, we will need to seek ways to do more with less,” Benavides said.

She said the unprecedented growth in assessed property values over the past two years is not on course to continue.

“We’re also seeing less growth in state realignment revenues, which are also sales tax and vehicle license fees. That funding funds health and human services and public safety programs,” she said.

Nerland said he expects revenue growth to slow and costs to continue to increase.

“The message to our departments, as we begin to tighten our belts, is to prepare for that,” said Nerland. “I hope it’s not flat, but we’re seeing signs it could be.”


Benavides report began on a high note, with the projection that the General Fund Budget would be balanced by the end of the year; that all but four general fund departments had stayed within their budgets; and that county departments, which are required to transfer restricted department funds for expenditures, continued to adhere to the county’s Fund Balance policy.

The four departments that did not remain at or below budget – that is, their net county cost (NCC) – were the Sheriff’s Office (FSO), the County Clerk/Registrar of Voters, the Department of Public Health (DPH) and the County Counsel.

Benavides said FSO ran over budget due to higher-than budgeted overtime costs, as well as other salary and benefit increases that were approved by the Board.

The County Clerk/Registrar of Voters encountered unanticipated and unreimbursed ballot measure costs – it is estimated the county spent upwards of $30,000 on Measure B in a losing effort. During public comments, Gloria Hernandez of Mothers Helping Mothers criticized both the Board and Chairman Nathan Magsig for the Board’s profligacy in its dogged support of Measure B. 

Measure B would have amended the Fresno County Charter by giving the Board the authority to establish or change geographic place names in the unincorporated areas of the county.

“The County Clerk said $20,000 to $30,000 was spent on Measure B,” she said. “For someone like me, who is on Social Security.”

The measure was soundly rejected in the March 5 primary.

“The only thing we’re stuck with, as taxpayers, is your stubbornness to continue appealing the lawsuit on Yokuts Valley against the state. The voters have spoken,” Hernandez said. “You all should just drop the appeal. Stop paying that fancy attorney for something you know you’re going to lose.”

The DPH also incurred higher-than-budgeted operation costs due to the animal control services facility. And the County Counsel had decreased revenues because of fewer billable hours.

Benavides said other departments incurred midyear salary and benefit increases, but these were necessary to improve employee recruitment and retention.

Nerland added that the county has negotiated all but one contract with county units, but he expects that contract will come before the Board soon to be executed. The contract, with the jail, juvenile hall and medical services, is the county’s largest and could result in significant costs that will be felt in the next fiscal year. He added the county’s liability insurance will increase by 7% in the next year.

Despite these setbacks, Benavides said departmental midyear expenditures for fiscal year 2023-2024 are inline with the midyear status for the prior two fiscal years.


To offset the state’s staggering budget deficit, Benavides said Gov. Newsom’s office has proposed a variety of spending reductions, delays and diversions, all of which would have varying impacts on the county.

One of these actions is to delay $60 million in state funding for Homeless Housing Assistance and Prevention (HHAP). Benavides said that due to grant distribution timelines, this delay should only have a limited impact on the county. But this possible delay in funds, coupled with the financial repercussions of Proposition 1, may have a cumulative impact on the county’s behavioral health resources.

During the discussion that followed the presentation, Nerland said one of his concerns regarding the county’s financial health is the impact of Proposition 1.

“I am concerned that it (Proposition 1) takes some of our MHSA (Mental Health Services Act) funds, and we have less discretion over how those funds are spent,” Nerland said. “It’s well intentioned, but the impact is something we’re going to have to work through.”

Nerland then addressed the elephant in the room – job cuts.

“Right now, the impact of the state budget and where those cuts are going to take place is unknown,” he said. “My recommendation is we are deliberate, maybe more surgical when it comes to that. My message to department heads is this is not the time for adding or for doing anything other than priorities, and those things that are absolutely necessary.”

But in a more ominous note, Nerland said if the state does not address the budget deficit soon and make the necessary changes to right the ship, the impact on the county would be quick.

“This is going to happen fast,” he said. “Our ability as a county and a community to communicate the impacts of that clearly but also quickly is going to be very important.”


During the post-presentation discussion, Vice Chairman Buddy Mendes said the public must be aware of the fact there is no middle ground when it comes to the state’s budget deficit.

“When people look at the governor’s deficit numbers and the LAO’s deficit numbers, we’re not going to come up with an in-between number,” he said. “The numbers could end up going higher than the LAO’s numbers.”

Mendes said the county is owed money from the state for the state programs the county administers. But the state continues to prevaricate, holding off paying.

“I think one of the gimmicks is to just get us the money later,” said Mendes. “So, we have to carry the ball a little longer. Some counties are not going to be able to carry that.”

During the discussion, Nerland said he expects the cost of utilities to increase by 15% to 20% in the coming years. Mendes attributed this to the state having run amok.

“We’re getting these higher and higher energy costs because of these goofy programs the state wants to run and how they want to run them,” Mendes said. “And now we have the highest electrical rates in the county. So, it’s just going to compound themselves.”

Darren Fraser