The Santa Cruz County Board of Supervisors approved a $1.29 billion budget on Wednesday, saying the spending plan aims to protect essential services amid rising costs, federal funding uncertainty and millions of dollars worth of deficit.

The fiscal year 2026-27 budget includes an $851.4 million general fund and supports more than 2,600 full-time equivalent positions. In a statement, county officials said the spending plan keeps public safety, health and human services and other essential operations while addressing an estimated $23 million structural budget gap.

The county will use one-time resources to balance the budget and avoid layoffs as it looks for longer-term solutions to the financial challenges. County officials said the deficit has been driven by inflation, rising operating costs and reductions in federal support for safety net programs.

“The board and county staff were faced with extraordinarily difficult choices,” County Executive Officer Nicole Coburn said in a statement. “These choices were made with an eye toward preserving the county’s long-term operational and financial sustainability.”

County officials said recent federal policy changes under H.R. 1, the spending bill passed by the Republican-controlled Congress last year, are expected to increase costs and reduce funding for programs that support healthcare, food aid, housing, homelessness services and behavioral health programs, adding pressure to local governments across California.

Supervisors said they made several adjustments, including preserving the county’s current conflict public defense model and delaying final decisions on some parks funding issues, including Sunday hours at Simpkins Family Swim Center and arts grants, until June 30.

The budget also continues investments in major county priorities, including affordable housing projects, road and park improvements funded through Measures K and Q, wildfire-risk reduction efforts and modernization initiatives aimed at improving county services.

Despite approving a balanced budget, county officials cautioned that significant financial uncertainty remains, warning that one-time funding cannot sustain operations indefinitely.