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San Luis Obispo County facing multimillion dollar budget shortfall

November 24, 2025

By KAREN VELIE

With a looming multimillion dollar budget shortfall, San Luis Obispo County is working on a plan to reduce costs and balance the budget.

SLO County revealed last week it is facing a $4 million to $11 million budget gap for the 2026-2027 fiscal year. The county bases its status quo budgets on revenue and costs from the prior year.

However, while revenue is stagnant expenses are climbing.

“The multi-year forecast continues to present a challenging picture as projections indicate that the county will continue to experience constrained revenue growth with expenditures outpacing revenues,” according to the SLO County Board of Supervisors Nov. 18 staff report. “The multi-year forecast highlights the need for reductions through a continued strategic rebalancing as well as sustained ongoing efforts aligned with the board’s adopted policies.”

SLO County’s budget deficit forecast for the 2027-2028 fiscal year climbs to $14.8 million. The forecast budget deficit rises to $18.7 million in fiscal year 2029-2030.

California provides approximately 35% of the county’s general fund operating revenue. Because of current fiscal challenges, the state could cut funding. Another 14% of the county’s operating revenue comes from federal funds, which could also face cuts.

The budget balancing plan includes a hiring freeze, deferring capital improvements, minimizing building maintenance costs and increasing fees.

“Hiring will be strictly limited to positions deemed essential to maintaining core service delivery and strategic priorities,” according to the staff report. “It is important to emphasize that reductions should be based upon priorities, not vacant positions.”

County administrators are conducting a comprehensive review of all county programs across all departments. The plan is to look at program impacts, costs, outcomes, and alignment with board priorities.

The goal is for the county to remain adaptable to changing conditions, to be able to regenerate in the face of setbacks, and to ensure long-term fiscal stability.

In the next few months, department heads will prepare and submit reduced budgets. Administration will review the budgets before providing the SLO County Board of Supervisors an update in March.

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Same as it ever was….20 years ago the county comptroller revealed that the county had a structural deficit going on. Back then, all agencies and departments took a hit , except emergency services. Look for a repeat of that scenario.

Administrators and unions set everything to best-case revenues. Very foolish, as the downward trend will continue with no rescue in sight. Ever.

Better hope goofy AI can cover some of those jobs, or have the signage contractor start making some” Gone Fishin’ “ signs soon.

Supervisors – welcome to the ugly side of governance. Making hard decisions on behalf of the community and taxpayers.


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“$4 million to $11 million” shortfall, actually a few times more if you were to count the under funded pension liability, and yet county officials refuse to address the root cause, outrageous administration compensation and they refuse to cut there first.


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