Federal Funding and the County’s Budget

The County of Santa Clara receives about $3.7 billion in funding from the federal government each year to support services and programs that serve our community. This represents approximately 30% of the County’s total FY 24-25 (July 1, 2024 – June 30, 2025) adopted budget.

Federal funding supports the delivery of medical and behavioral healthcare, social services, public health programs, child welfare services, housing, public safety, and many other critical services in Santa Clara County. Major changes in federal funding could have a direct and significant impact on the critical safety-net services the County provides.

Federal Funding Supports Critical County Services

The County of Santa Clara has an annual operating budget of $12.5 billion for fiscal year 2024-2025. Federal funding represents about 30% of the County’s total budget or roughly $3.7 billion.

The County’s federal funding mainly falls into the following categories: 

• $2.9 billion for Medicare and Medicaid covered health care services (including behavioral health care and other services)
• $400 million for social services programs for state directed programs such as CalFresh (SNAP) and CalWORKs (TANF)
• $140 million for federal grants that support programs related to public health, housing, transportation, and public safety 

The vast majority of the County’s federal funding supports critical health care service delivery for Santa Clara County residents and the broader region. Santa Clara Valley Healthcare, which operates the second largest public hospital system in California, receives nearly 70% of its funding from the federal government through the Medicare and Medicaid programs.

Medicaid is the single largest source of federal revenue for the County of Santa Clara, representing about $1.9 billion in funding received by the County this fiscal year alone. Medicaid is the most significant insurance program for Americans—covering nearly 1 in 5 Americans and about 1 in 2 children.

Federal funding directly supports 42% of the Social Services Agency’s budget and about 30% of the Public Health Department’s budget.

Federal Actions Impacting the County’s Budget

The County is following the situation at the federal level very closely to understand how County programs and services may be impacted by potential actions taken by Congress, the federal administration, or the courts. 

At this time, we cannot assume all current federal revenues will continue to flow as normal to the County or to the State of California. In fact, the federal government has already begun cutting some revenues that flow directly and indirectly to the County. 

We anticipate that revenues to the County will be cut through the federal Budget Reconciliation process as Congress is considering major reductions to Medicaid and social services programs to finance tax cuts. A final Budget Reconciliation bill could be voted on as early as May. 

We expect additional cuts to occur with Congressional adoption of the next federal budget that is supposed to begin October 1, 2025. The federal administration may eliminate or impose conditions on federal grants and other funds for local programs that undermine the County’s mission and values. As a result, the County may not be able to accept these funds, further reducing the resources available to deliver services.

On top of these factors, there are other variables that may affect the County budget, including economic impacts from federal actions, federal and state funding reliability, inflation or tariff-related increases in costs for goods and services, and the possibility of an economic recession.

Upcoming County Budget Process

The County is facing major fiscal challenges due to federal actions and other factors as it begins planning for the next fiscal year budget (July 1, 2025 to June 30, 2026). 

The County’s primary budget planning goals are to prioritize continuation of critical safety-net programs, minimize impacts to employees, and protect services and policies being targeted by the federal government. 

The County’s next budget will be publicly discussed and voted on by the Board of Supervisors during a series of Budget Hearings on June 9, 10, and 12. The County Executive’s Recommended Budget  was released on May 1.  There will be public discussions of the budget during the Budget Workshops from May 12-14 and during the Budget Hearings in mid-June.

Additional information about the County’s budget process and upcoming public meetings is available on the County’s Budget webpage.

Related Resources

• Fact Sheet on Federal Funding Impacts to the County Budget
• County Budgetary Process Timeline
• 2024-2025 / 2025-2026 County Budget Calendar
• Statement from County Executive James R. Williams on the Impact of Proposed Federal Funding Cuts to Santa Clara County Services
• Your Tax Dollars at Work: Understanding the County of Santa Clara Budget