LEGISLATION COMMITTEE
Meeting Date: September 22, 2025
Subject: Major Impacts from Federal Reconciliation and the State Budget
Submitted For: Legislation Committee
Department: County Administrator’s Office
Presenter: E. Struthers
Contact: (925) 655-2045
Referral History:
The Legislation Committee monitors and provides direction on federal and state budgetary, legislative, and regulatory matters of interest to the County. The recently-adopted federal budget reconciliation bill, H.R. 1, includes major impacts to federal programs operated by Contra Costa County and those we serve.
Referral Update:
The recent passage of the federal Budget Reconciliation (H.R. 1) and the adoption of the State’s FY25-26 Budget will result in numerous multi-year impacts to the County’s operations, finances, and programs.
Federal H.R. 1 contains changes that will result in major operational impacts to the county and those we serve over the next ten years. According to the Congressional Budget Office (CBO), the majority of funding reductions are attributed to Medicaid (Medi-Cal) and SNAP (Cal-Fresh). These reductions are accomplished through numerous-often complex and inter-related-policy changes affecting eligibility, administration, reimbursement rates, benefit amounts for participants, and increasing responsibilities for state/local governments.
The federal funding reductions to these locally administered federal programs are significant. Congressional Budget Office scored the cuts to Medicaid at a cost-savings on nearly $1 trillion, resulting in the loss of health insurance coverage for an estimated 12 million Americans-including more than 3 million people in California. Additionally, H.R. 1 makes a historic 30% cut to SNAP and shifts significant costs to states, compromising the State’s general fund budget along with the food and economic security of millions of people.
To implement these changes in a thoughtful way, we are embarking on a process to analyze the local impacts of these policies. Goals of the analysis include:
• Gain a deeper understanding how the funding and policy changes in H.R. 1 and the State budget agreement will impact Contra Costa County’s funding sources, operations, and the people we serve; and
• Consider potential policy changes and solutions that will guide implementation and help ameliorate negative impacts.
Departments are asked to review the policy changes that will have major impacts on their department’s operations, finances, and the people they serve. The County Administrator’s Office is collecting information on operational impacts, community/participant impacts, fiscal impacts, and other considerations. Departments are also asked to consider potential policy changes needed at the State level, with the understanding that restoration of funding is unlikely without alternate revenue sources identified.
It is important to note that federal guidance on many of these policies is still in development. Additionally, this analysis relies upon a variety of inputs and assumptions about future conditions such as community need, cost of providing services, and other factors. Departments are asked to identify forecast inputs, along with any major assumptions (such as enrollment figures) and their data sources. These analyses will need to be revisited on an ongoing basis, as inputs are revised or other assumptions used in forecasting become more refined. Initial information is requested by the end of September, so that this information can be further refined over time and presented in a clear and useful way.
This information will be used in several ways:
• Identify near and long-term local budgetary and fiscal challenges;
• Ensure appropriate local implementation of required policies; and
• Guide potential legislative, budgetary, and regulatory advocacy efforts.
Recommendation(s)/Next Step(s):
DISCUSS analysis process for major impacts resulting from federal reconciliation (H.R. 1) and the state budget, and provide direction or feedback to staff, as needed.
Fiscal Impact (if any):
This item has no direct fiscal impact, however, the impacts of the state budget and federal budget reconciliation are very significant to County operations and services.