Fresno County supervisors received grim budget news as the county prepares to potentially pay hundreds of millions of dollars more in medical costs for those losing out on state-funded insurance.

Joe Prado, Fresno County Public Health Director, told supervisors at the March 17 meeting that federal cuts to Medi-Cal could force between 11,000 and 30,000 residents to turn to the county for help.

In 2010, before passage of the Affordable Care Act, Fresno County had 19,000 people on indigent care.

Those “conservative” estimates translate to expenses ranging from $41 million to $241 million for a line item never in the county budget before, Prado told supervisors. He called the $41 million low-end estimate “staggering.”

“If more people fall into indigent care, these numbers just go up and up and up,” he said. The county will have a better idea of indigent care figures in July, officials said.

And it’s not just Public Health facing increased costs.

With states and counties paying more for SNAP and CalFresh benefits and counties picking up more mental health costs, Fresno County’s  Behavioral Health Department and the Department of Social Services are facing extraordinary budget pressures.

Apart from benefits changes, inflation affecting fuel and goods means an estimated additional $17.5 million in costs to the county, said County Administrative Officer Paul Nerland.

He said while the county — one of the region’s biggest employers — is not yet in a hiring freeze, “hiring controls” are in place.

“For departments that are listening, we’re going to need to consider, will you be able to afford those positions next year if we have to cut?” Nerland said.

Indigent Care in Fresno an ‘Unfunded Mandate’

The structure of Fresno County means the state puts the burden of paying for indigent care on the county’s shoulders. But since passage of the Affordable Care Act, the need for counties to cover indigent care has diminished. California went one step further with AB 85 in 2013, eliminating funding for indigent care.

Federal changes in 2025, however, changed that, and with no money budgeted for indigent care and no money coming in, Fresno County will have to scrounge to cover those costs.

Prado said moving away from indigent care and to Medi-Cal managed health plans would alleviate some of that impact, halving costs from a potential $8,000 per patient to $4,000.

“If we at the state of California take a step back and look at what is going to cost us the least amount of dollars, it is a managed care plan,” Prado said.

Officials will have to await the Fresno County Assessor’s report — usually in July — to see what property value growth will yield for tax revenue. The county does its budget in September, after federal and state budgets are done to get a better picture of what to expect.

Property Tax Revenue

While in 2025, property values climbed 6.5%, county budget director Paige Benavides recommended keeping outlooks conservative at 3%. That’s a drop from the 4% estimate she recommended about the same time last year ahead of the tax roll release from Fresno County Assessor Paul Dictos.

That lower forecast likely portends lower revenues.

“At this point, we’re expecting growth for 26-27 to be minimal,” Benavides said.

Fresno County’s 2025-26 fiscal year budget was $5.34 billion. To make the budget pencil, the county used $15 million in one‑time funds and a net reduction of 57 positions. The general fund comprised $2.62 billion.

Behavioral Health and CalFresh Face Similar Cuts

As people with mild or moderate mental health problems lose coverage for medication, conditions could very well become severe for them, said Susan Holt, director of the Behavioral Health Department.

It’s at that point their medical needs fall to the county to cover.

“When folks lose their Medi-Cal and lose the treatment they’re receiving for a mild or moderate impairment, their impairment will escalate, and they will hit our system completely unfunded,” Holt said.

The county anticipates $5 million in additional costs for the department while also expecting $15 million less in revenue. Federal statutes further complicate inpatient funding for people with severe mental health conditions.

Federal changes also place more burdens on the state and county to cover food and other benefits through SNAP or CalFresh, said Sanja Bugay, director of the Department of Social Services.

An additional 7.5% share of cost for that program equates to about $7 million more in expenses for the county, Bugay said.

Tighter Eligibility Requirements

Those changes will also mean more work for county workers who have to determine eligibility for an anticipated 50,000 clients subject to new federal work requirements.

Under the One Big Beautiful Bill, the federal government will also punish states for excessive error rates in determining program eligibility, Bugay said.

Last year, California’s benefits error rate — something Bugay attributed more to clerical or applicant mistakes rather than fraud — was 11%, meaning about $2 billion in fines to California. Fresno is one of 19 counties subject to error rate evaluation.

“I don’t know where the state would find $2 billion, and I don’t know if any of that would be passed to the counties, but that’s a risk,” Bugay said.

Size of State Budget Deficit Hinges on Stock Market

County supervisors are keeping an eye on the economy at large. In a presentation to supervisors about state legislative activity, Paul Yoder, Fresno County’s Sacramento lobbyist said state officials are still determining how large the budget deficit will be.

The Legislative Analyst’s Office predicted an $18 billion shortfall compared to Gov. Gavin Newsom’s $3 billion projection. Yoder said Newsom justified this with stronger than expected October, November, and December revenues.

The difference lies in when the LAO and Newsom’s Department of Finance predict the stock market bubble to burst, Yoder said.

“The Legislative Analyst’s (Office) believes it will happen during the 26-27 budget year, Department of Finance and Gov. Newsom said we don’t believe that it’ll happen that quickly, we think it’ll happen later,” Yoder said.

Where Does Homeless Funding Stand?

The question of homeless housing funding hung over city and county officials’ heads in the second half of 2025. The region could have lost hundreds of shelter beds without that funding in addition to money lost for other services.

Local governments use Homeless Housing, Assistance, and Prevention grants to fund various kinds of shelter beds and programs for homeless people.

In February and March, the city and county of Fresno received millions of dollars in HHAP money, despite Newsom thinking he could wean cities and counties off the program with Prop. 1, Yoder said.

Prop. 1, known as the Behavioral Health Services Act, required that 30% of a special tax money on California’s wealthiest individuals go toward emergency and affordable housing.

Lobbyists are petitioning Newsom for another round of HHAP funding in the coming year.

“What we have been trying to do and working very, very diligently, is to ensure that this year, Gov. Newsom’s last year, there is still another round of funding for HHAP so that we can at least get to the next governor and start trying to work with that governor and hopefully get this money more in a fashion where counties can plan better with it,” Yoder said.