Sonoma County, CA Confronts Funding Crunch Amid Federal Policy Overhaul

Sonoma County is navigating unprecedented fiscal uncertainty as shifts in federal policy—codified through executive action and the July 2025 passage of House Resolution 1 (HR1)—threaten to destabilize its social safety net and spark complex legal disputes. The county discussed the potential impacts of these federal actions at its October 14th meeting, highlighting the risks to funding streams and service delivery.

The county’s adopted Fiscal Year 2025–26 budget depends on $386.3 million in federal funding, supporting more than a quarter of the local workforce. County officials caution that the primary strain will come not only from potential cuts but also from sweeping changes to program eligibility and guidelines, with the most severe effects expected in FY 2026–27.

Financial Exposure: Safety Net Services

The bulk of federal funding—$274.27 million—is concentrated in Safety Net Services, including the Departments of Human Services (HSD), Health Services (DHS), and the Community Development Commission (CDC). These programs face looming deadlines that could affect tens of thousands of residents:

• Medi-Cal: Serving roughly 135,398 individuals, Medi-Cal faces major eligibility restructuring. New work requirements taking effect December 31, 2026, may impact 30,104 individuals, while tighter eligibility for noncitizens and increased redeterminations could affect 22,473 and 50,422 individuals, respectively.

• Behavioral Health Revenue: DHS relies on Medi-Cal coverage to fund local behavioral health services. Reductions in eligibility could lead to decreased service access and revenue shortfalls.

• CalFresh: Supporting 42,700 residents, CalFresh will expand work requirements for able-bodied adults with dependents, potentially affecting 12,990 individuals. Administrative cost shares rise by $2.8 million starting October 1, 2026, and $588,000 in SNAP-Ed funding is slated for elimination on October 1, 2025.

• Housing Vouchers: The CDC administers $69.9 million in rental assistance for 3,432 households. Federal changes in 2026 threaten reductions in both Permanent Supportive Housing (PSH) and Continuum of Care (COC) grants.

Policy Conditions and Legal Countermeasures

Sonoma County Confronts Funding Crunch Amid Policy Overhaul

Sonoma County has mounted legal defenses:

• Participating in lawsuits such as San Francisco, et al., v. Trump and King County, Wash., et al., v. Turner, the county has secured preliminary injunctions blocking conditions tied to sanctuary jurisdiction and DEI restrictions.

• A permanent injunction for California political subdivisions, including Sonoma County, protects FEMA grant eligibility from restrictive conditions.

These protections remain under challenge, with active appeals nationwide. If overturned, the county may face a choice between complying with restrictive terms—potentially requiring employee certifications—or foregoing federal funding. Staff warn of possible clawbacks of previously disbursed funds.

Broader Economic and Community Impacts

The fiscal and political uncertainty also affects education and Sonoma County’s vital agricultural workforce. The county hosts approximately 83,300 immigrants, including up to 40,000 undocumented individuals, who are critical to agriculture, caregiving, and service sectors.

• Workforce & Economy: Rising housing and income insecurity may drive households to cut discretionary spending, impacting local businesses and tax revenue. Labor shortages are expected in agriculture as immigrants leave, are deported, or avoid work due to fear.

• Education: Aggressive immigration enforcement near schools and uncertainty over federal funding for English learner and migrant programs jeopardize services for one-fifth of local students classified as multilingual learners.

• Public Fear: Surveys indicate widespread fear of separation and distrust of public systems, with 68% of respondents unsure whom to contact in an immigration emergency.

In response, county staff are maintaining a conservative fiscal posture, closely tracking legal developments, and advocating at state and federal levels to safeguard funding and minimize service disruptions.