1850
ATA CLARY
9/73/2025 item 3.D
Impact of Federal Budget Cuts
and the County's Response
Santa Clara City Council
September 23. 2025
County of Santa Clara 1 of 15
H.R. 1 Overview
H.R. 1, or the "One Big Beautiful Bill Act," is the federal budget reconciliation bill that was signed into law by President Trump on July 4, 2025.
Enacts the largest cuts in our nation's history to Medicaid (known as MediCal in CA) and food assistance (CalFresh in CA) to help fund tax cuts primarily benefitting the wealthiest Americans.
→ $1 trillion in cuts to Medicaid
→ $186 billion in cuts to Supplemental Nutrition Assistance Program (SNAP) Medicaid is a critical social safety net program that provides healthcare coverage for nearly 1 in 5 Americans. Approximately half of all children in the United States are covered by Medicaid.
SNAP provides basic food assistance for 1 in 8 Americans. SNAP is the largest child nutrition program providing benefits for 1 in 4 children in the United States.
2 of 15
POST MEETING MATERIAL
H.R. 1 Impacts to Our Community
• H.R. 1 puts access to healthcare and food assistance at risk for thousands of families in Santa Clara County.
• 1 in 4 Santa Clara County residents (465,000) rely on Medi-Cal. • 133,000 Santa Clara County residents rely on CalFresh for food assistance. • Counties in California have a legal obligation to provide care to the poor (Welfare and Institutions Code, Section 17000) and all hospitals are legally obligated to provide emergency care to patients regardless of the patient's ability to pay. • With a much larger uninsured population and dramatically fewer resources with which to provide care, H.R. 1 puts the County's hospitals and health services at risk, threatening access to care for all residents.
3 of 15
H.R. 1 Creates a County Fiscal Crisis
• Medicaid is the single largest source of federal funding for the County, totaling $2.3 billion in FY25-26.
• Medi-Cal funding accounts for more than half of all revenue for Santa Clara Valley Healthcare (SCH), the County's healthcare delivery system. • The County expects $1 billion in lost revenue per year, representing a significant portion of the $4.6B total annual budget for Santa Clara Valley Healthcare.
• This is a destabilizing level of cuts that can only result in extraordinarily harmful service reductions if not addressed.
4 of 15
Projected Impact to County Revenues (Summary)
S0.0 0.0
(6.7) (54.5) (70.0) (70.2)
(222.8)
1S200.01
(506.5)
15400.0!
(958.7)
(S600.01 (222.8) (513.1) (1,155.1)
(1,303.0)
Millions of Dollars ($800.0]
($1.000.0
(1,013.3)
($1.200.0
(1,225.1)
($1.400.0)
(1,373.2)
($1.600.0)
2025-26 2026-27 2027-28 2028-29 2029-30
County Fiscal Year
5 of 15
• Federal Nutrition Actions Federal and State Health Actions H.R. 1 Threatens Access to
Healthcare and Local Hospitals
Santa Clara Valley Healthcare operates 4 hospitals and 15 major health centers in Santa Clara County and is the largest provider of many critical healthcare services to all residents:
Provides care for nearly 1 in 4 Santa Clara County residents. • Operates 2 of only 3 trauma centers in Santa Clara County and handles 80% of all trauma cases originating within the county.
• Half of all 911 transports are taken to a County hospital. • Every 11 minutes a 911 call in Santa Clara County results in a patient being transported to a County hospital.
• Largest provider of both Medi-Cal and Medicare hospital services to Santa Clara County residents.
• Only Burn Center in Santa Clara County and 1 of only 3 regional centers of its kind between Los Angeles and the Oregon border.
• Top ranked Rehabilitation Center on the entire West Coast.
SANTA CLARA VALLEY
MY HEALTHCARE
Why Does the County Operate
Four Hospitals?
• All 3 of the hospitals the County has acquired in recent years were purchased to prevent hospital closure or to
reverse the termination of critical lines of service
Saint LoulseR:
• In 2019, the County was the only bidder when
O'Connor and St. Louise went through bankruptcy.
• In 2025, the County purchased Regional Medical
Center (RMC) after the former operator terminated
trauma, STEMI, and other critical services in August
2024. SCH restored these services on April 1.
• For every dollar the County spends on healthcare, 88 cents comes from healthcare system revenue.
• It is only due to the unprecedented cuts from the
federal government that the sustainability of these
hospitals has been put at serious risk.
7 of 15
H.R. 1 Puts County Services at Risk
Federal cuts of the magnitude we face present a major risk to all County services from public safety to homelessness. A $1 billion funding shortfall is too significant for Santa Clara Valley Healthcare to absorb on its own.
Housing Homelessness Behavioral Public safety
support prevention health
8 of 15
Community Impacts: City of Santa Clara
+ HEALTHCARE EMERGENCY CARE
• 1 in 6 (22,400) residents rely on Medi-Cal • 90% of trauma cases transported by • More than 26,000 residents receive care from ambulance are taken to a County hospital Santa Clara Valley Healthcare • 45% of all 9-1-1 ambulance trips are taken to • More than 68,000 outpatient visits a County hospital (O'Connor is most utilized of • More than 15,000 Emergency Room visits any hospital). • More than 15,000 hospital days
HOMELESSNESS
OI! FOOD ASSISTANCE • Investments in critical homelessness prevention, shelter, and housing solutions
• 5,530 residents rely on CalFresh to put food
on the table
County's Response to H.R. 1
To address the extraordinary fiscal emergency caused by H.R. 1, the County is taking swift, proactive steps in several areas.
Reducing Costs and Increasing Revenue
Seeking State Support
Pursuing Local Solutions
10 of 15
County's Response
Actions to Reduce Costs and Increase Revenue
• The County has launched a multitude of initiatives in recent fiscal years in response to declining economy and slowing property tax growth:
• Operational and organizational efficiencies
• Restructuring programs and service delivery models
• Reviewing fees and charges to ensure full-cost recovery • Hiring freezes and staff reductions, including eliminating close to 800 positions over the past three fiscal years
• Despite these actions, the funding gap from H.R. 1 is unprecedented.
Sizable reductions and consolidations of services will be needed. 11 of 15
County's Response
State and Local Actions
• The State will play a critical role in determining how federal cuts under H.R. 1 are absorbed.
• Medi-Cal and CalFresh are jointly funded by the federal and state government.
• County Administration will work closely with the State to protect public hospitals
• Public hospitals make up only 6% of California's
hospitals but operate more than 50% of trauma and
burn centers and train over 50% of California's
doctors.
12 of 15
County's Response
Measure A
> On August 7, 2025, the Board of Supervisors unanimously voted to place an emergency, temporary general sales tax measure of 5/8 of a cent on the ballot.
If approved, the tax would be in place for five years and generate $330 million in revenue each year.
> The County has very limited options for raising local revenue for services.
Unlike cities, counties can only enact taxes that have been affirmatively authorized by the State.
› SB 335 grants the County temporary authority to provide voters the option to raise local sales taxes by 5/8 of a cent for County services. • Measure A does not affect the ability of any city
to propose a sales tax measure to their voters.
13 of 15
Summary
• Our community is facing a true healthcare emergency caused by the federal government.
• The crisis will hit us soon and worsen in the next few years. • The County's hospital and health clinics will be hit hardest, but other critical County services - such as mental health care and public safety - are also threatened. • Everyone's care is at risk, as closure of trauma centers or emergency departments increase wait times and affect patient care regardless of what insurance you have. • Even if the temporary sales tax passes, the County will have to make hundreds of millions of dollars in service cuts to address a $1 billion+ shortfall. • Over the next several years, we need to come together as a community to chart a path forward that ensures the health and well-being of our residents, especially those most in need.
14 of 15
Thank You
Visit scc.info/federalfunding for more information
15 of 15
POST MEETING MATERIAL
COUNTY OF SANTA CLARA COUNTY
THIS
Impacts of Federal
SANTA 1850 CLARD
Budget Cuts
Recently adopted federal budget cuts present significant threats to services and programs that serve our entire community.
H.R. 1 was a budget bill signed into law by President Trump on July 4, 2025.
The bill included major cuts to Medicaid and food assistance, putting at risk health care and food for millions of Americans. Medicaid provides healthcare access for 1 in 5 Americans and nearly half of all children in the United States.
Due to these federal decisions, the County of Santa Clara will lose more than $1 billion in federal funding per year.
Critical funding for safety net services is at risk.
The County of Santa Clara receives about $3.5 billion in federal funding each year. Medicaid is the single largest source of federal funding.
Federal funding supports the delivery of medical and behavioral healthcare, food assistance, social services, public health programs, child welfare services, housing, public safety, and many other critical services. The County receives more than
The County operates the second largest public hospital system in California, which receives a majority of its funding from the federal government through $2.3 billion Medicare and Medicaid. Our public hospital and healthcare system serves in Medicaid funding. everyone in our community, regardless of insurance status, and provides critical trauma and emergency care. Federal funding cuts put critical health care and safety-net services at risk.
Federal cuts will impact thousands of families in our community. 465,000 133,000 72,000+
G00O
Santa Clara County Santa Clara County residents Santa Clara County residents rely on are enrolled in the Supplemental adults are enrolled in Medicaid for access Nutrition Assistance Program state only MediCal for to healthcare (SNAP) and receive food their healthcare coverage assistance
IMPACTS OF FEDERAL BUDGET CUTS | County of Santa Clara
What does H.R. 1 do and how will it impact our community? H.R. 1, also known as the "One Big Beautiful Bill Act," makes $1 trillion in cuts to Medicaid and $186 billion in cuts to the Supplemental Nutrition Assistance Program (SNAP) over the next ten years. Nearly 12 million Americans will lose
Starting in December 2026, the bill will require certain Medicaid Medicaid coverage, enrollees to work in order to be eligible for healthcare coverage. It will including an estimated also require enrollees to prove their eligibility more often. This will increase barriers to enrollment and cause people to lose their coverage. 3.4 million Californians.
The bill also makes it harder for families to access food assistance and requires SNAP program enrollees to work in order to receive assistance. This change is expected to impact more than half of all SNAP enrollees in Santa Clara County.
When will changes to MediCal and SNAP go into effect?
July 4 January 1 December 31 July 1
H.R. 1 is signed into State only Medi Cal New work requirements New $30 monthly law. SNAP work enrollment freeze goes for Medicaid enrollees premiums go into effect requirements begin. into effect for begin. for state only MediCal undocumented adults. enrollees.
2025 2026 2027
What can we do to protect our social safety net?
Federal cuts to safety net programs will make it harder for thousands of families in our community to access critical care and benefits.
Since Medi-Cal and SNAP are joint federal/state programs, the State of California will play a key role in deciding what happens next now that H.R. 1 has become law. The County is committed to working in direct and close collaboration with our State leaders to explore every opportunity to mitigate impacts on our community. We will need to come together as a community to protect and preserve social safety net services for those who need them most.
Learn more: @countyofsantaclara @sccgov.bsky.social
scc.info/federalfunding ffacebook.com/county.of.santa.clara @sccgov
July 2025
County of Santa Clara
Response to Federal Budget Cuts
Addressing a $1 Billion Funding Shortfall
The County is facing an extraordinary financial challenge due to federal action, creating a gap of more than $1 billion in annual funding. This magnitude of funding loss puts all County services at risk, including healthcare, behavioral health, and public safety services. To meet this challenge, the County is taking a proactive, multi- pronged approach:
A Making sizable budget reductions while protecting core safety net services A Seeking support from the State to reduce the impact on our public healthcare system A Pursuing local revenue solutions
A County Actions to Reduce Costs and Increase Revenue
Current and Recent Actions Additional Steps Required
The County has launched a multitude of initiatives in Despite past efforts, the funding gap from recent fiscal years to address an already declining H.R. 1 is unprecedented. County economy and slowing property tax growth: Administration is:
• Streamlining operations and consolidating
• Operational and organizational efficiencies
services
• Restructuring programs and service delivery models
• Reviewing fees and charges to ensure full-cost • Optimizing Medi-Cal managed care recovery strategies
• Hiring freezes and staff reductions, including • Exploring all possible revenue and eliminating close to 800 positions over the past three cost-saving opportunities fiscal years
A Seeking State Support A Pursuing Local Solutions
Public hospitals rely heavily on MediCal funding and State support is uncertain and not fully under the provide critical services. Although they make up only 6% County's control. The County must look at other options of California's hospitals, public hospitals operate more to avoid devastating service cuts. than 50% of trauma and burn centers and train over
50% of California's doctors. The Board of Supervisors unanimously placed a five- eighths of a cent general sales tax on the November 4,
Medi-Cal and CalFresh are jointly funded by the
2025 ballot. Revenue would be guaranteed for five years federal and state government. The State will be critical and cannot be taken by the federal or state government. in determining how federal cuts under H.R. 1 are If passed by voters, the temporary increase in the sales absorbed. County Administration will work closely with
tax will generate $330 million a year in revenue.
the State to protect public hospitals and services.
Fiscal Reality
H.R. 1 creates a true fiscal crisis for the County at a time of slow property tax growth and economic uncertainty in our region. Even if the sales tax measure passes, the County will have to make hundreds of millions of dollars in service cuts to address a $1 billion shortfall. Without pursuing a multi-pronged approach, critical community services that keep our region healthy, vibrant, and safe could be severely reduced or lost.
For more information about the County's response to federal budget cuts, visit: scc.info/federalfunding
SANTA CLARA VALLEY
HEALTHCARE
Santa Clara Valley Healthcare (SCVH) provides critical care and life-saving services to our community.
Recent federal funding cuts directly threaten our ability to serve our community and provide access to critical care.
We operate the largest public hospital system in Northern California. Our four hospitals and fifteen major health centers are the backbone of our local healthcare safety net, delivering high-quality, compassionate, and accessible care across Santa Clara County.
We are the health care provider for nearly 1 in 4 Santa Clara County residents and are the largest provider of both Medicare and Medi-Cal hospital services in the region.
We offer everything from trauma, burn, emergency, and specialty care, including offering 9 walk-in urgent care clinics and over 60 specialty and subspecialty services, that includes cancer, kidney, and cardiovascular care. U.S. News & World Report recently named Valley Medical Center's Rehabilitation Center a Top 10 Best Hospital, ranking as the best on the west coast for brain injury, spinal cord injury and stroke rehabilitation.
O'Connor Hospital Regional Medical Center Santa Clara Valley Medical Center Saint Louise Regional Hospital
SANTA CLARA VALLEY
HEALTHCARE
Salnt Louise In
465,000 patients
receiving care
1.25 million patient visits
to a doctor or clinic
— We're Here When You Need Us
We ensure high-quality care is available when you or your loved ones need it most. We serve everyone in the community, whether you have insurance or not.
EME
306,000 275,000 6,900
Hospital inpatient days Emergency department visits Trauma-related visits (over 800 patients per day) (over 750 per day)
2 of 3 Trauma Centers in the
Nearly half of all Emergency county are operated by Santa epartment visits are at San Clara Valley Healthcare.
ara Valley Healthcare hospita
In 2024, Santa Clara Valley
Half of ambulance transports Medical Center cáred for more 4,200 + from 9-1-1 calls go to one of our trauma patients than any four hospitals.* other hospital in California.
Babies delivered annually
Santa Clara Valley Healthcare projected FY2025 data, with Regional Medical Center as of 4/1/2025; *Santa Clara County Emergency Medical Services agency, CY2024.
SANTA CLARA VALLEY HEALTHCARE I Locations & Services
SANTA CLARA VALLEY HEALTH CARE
CHILPITAS
(PALO ALTO 4 Hospitals *
• Santa Clara Valley Medical Center (SCVMC) +
• O'Connor Hospital (OCH) *
SUNNYVALE
Regional Medical Center (RMC)
Saint Louise Medical Center (SLRH)
(SAN JOSE
(28g) 15 Major Health Centers
• Valley Health Center Downtown +
• Valley Health Center East Valley +
* HEALTHCARE , SANTA CLARA VALLEY • Valley Health Center Gilroy + (LOE GATOE • Valley Health Center Lundy
• Valley Health Center McKee
HORGAN HILL • Valley Health Center Milpitas
* Hospitals
9 Valley Health Center Moorpark ^
9 Health Centers with Urgent Care
* • Valley Health Center Morgan Hill +
Health Centers (No Urgent Care)
9 Valley Health Center North County +
OILROY
• Valley Health Center San Jose #
MAP IS NOT TO SCALE
Valley Health Center Sunnyvale
Valley Health Center Tully
Valley Health Center VASC
Our award-winning programs (Vietnamese American Service Center) and nationally ranked centers show our • Valley Health Center at Alexian commitment to excellence. • Valley Health Center at HomeFirst Shelter Presence of an urgent care and type offered: + adult & pediatric urgent care; ^ adult urgent care; * pediatric urgent care; and # pediatric & women urgent care Specialty Services & Centers Primary and Preventive Health Services • 60+ adult and pediatric medical and surgical specialty & • Comprehensive adult & pediatric primary and subspecialty services preventive health services, including dental, lab, • Center for Advanced Wound Care & Hyperbaric Medicine (OCH, SLRH) imaging, pharmacy and support services. • Center for Digestive and Liver Health (SCVMC) • Valley Homeless Healthcare Program • Emergency, consultation and inpatient psychiatric services • Gender health services • Labor & Delivery Units (OCH, SCVMC, SLRH)
Stroke, Trauma and Burn Care
• NICU Centers: Level III (OCH), Regional/Level IV (SCVMC) • Pediatric Intensive Care (SCVMC) • Level | Adult & Level II Pediatric Trauma Center (SCVMC) • Rehabilitation Center (SCVMC): Nationally ranked adult & pediatric • Level I| Adult Trauma Center (RMC) brain injury, spinal cord injury and stroke rehabilitation • Primary Stroke Centers (OCH, SCVMC, SLRH) • Robotic Surgery Program (OCH, SCVMC) • Regional Adult and Pediatric Burn Center (SCVMC) • Sobrato Cancer Center (SCVMC): Integrated adult medical, surgical • STEMI Receiving Centers (OCH, RMC, SCVMC) and radiation oncology services • Thrombectomy-Capable Stroke Center (RMC) September 2025