County Dems Will Need a Republican Vote to Respond to Federal Cuts

Democrats on the county Board of Supervisors are crafting a plan to help protect San Diegans reliant on food programs and Medi-Cal insurance from federal cuts. They’ll need a Republican ally to execute them. 

Supervisors are set to vote Tuesday on a policy change that would allow the county to dig into its massive rainy-day fund to minimize the blow of cuts instituted by the Trump administration-backed Big Beautiful Bill Act.  

Approving the policy change requires three votes, an easy hurdle with the recent inauguration of Democratic South Bay Supervisor Paloma Aguirre. Aguirre is among a chorus of progressives countywide who have for years urged the county to raid its long-growing bank account to invest more in services and staff and more recently, to address budget challenges like impending federal cuts. 

But per state law, Democrats need a fourth vote to pull from the county’s big bank account outside the county’s annual budget process. That means at least one Republican supervisor must approve using county reserve funds to soften the blow of federal cuts – and neither Republican supervisor has expressed enthusiasm about dipping into the county stash. 

East County Supervisor Joel Anderson – often a key swing vote on the county board – wrote in a May Times of San Diego op-ed that even changing the county’s reserve policy could put the county government on “a dangerous path of unsustainable spending.” 

Anderson, who earlier this year separately supported county staff analyzing the potential impacts of federal cuts and notifying federal officials of county concerns about them, through a spokesperson declined to comment on how he might approach board Democrats’ proposals. 

A spokesperson for North County Supervisor Jim Desmond, a Congressional candidate who has repeatedly criticized proposed reserve policy changes, did not respond to requests for comment. 

The county has spent years building up a large bank account that as of last June had grown to nearly $3 billion, according to the county’s latest comprehensive annual finance report. But much of that cash hasn’t been easily accessible.   

Under the county’s current reserve policy, about $1.1 billion was considered essentially off limits or restricted by law or formal pledges to provide housing-related loans or pension payments. Another $570 million was committed to line items such as capital projects and affordable housing.  

Months ago, Democratic Board Chair Terra Lawson-Remer and Supervisor Monica Montgomery Steppe zeroed in on two other accounts: county’s nearly $692 million unassigned account, which county officials have long said is essentially its available rainy-day fund, and its nearly $635 million assigned fund. Lawson-Remer has said the assigned fund is made of line items the county expects to cover in the future such as contracts and maintenance.   

In May, the two Democrats unsuccessfully asked fellow board members to amend the policy. Now that Aguirre is on board, they’re trying again. 

Their latest push follows estimates from county staff that new work requirements alone could imperil access for more than 325,000 San Diego Medi-Cal recipients and 96,000 who rely on food assistance. County officials estimate these changes and others could cost county government at least $286 million a year. 

Lawson-Remer and Montgomery Steppe are urging policy changes they say could allow the county to chip away – but not fully cover – that cost. The policy calls for the county to spend no more than a quarter of its available reserves in a single year – and only if the county sees a drop in revenue or an economic downturn. 

That county windfall, which Lawson-Remer’s team estimates could total about $90 million a year in the immediate future, relies on three key policy changes. 

Current county policy – based on guidance from the Government Finance Officers Association – calls for the county to hold at least two months of operating cash in its unassigned account to safeguard the county from major budget hits. County officials say this now equates to $973.5 million, more than the nearly $692 million the county had in the bank as of last June.  

Lawson-Remer and Montgomery Steppe want to eliminate line items including capital costs now incorporated into the county’s calculations that increase the funding that must sit in the bank. 

The two Democrats also want to combine the county’s unassigned and assigned accounts, making them a collective rainy-day fund. 

They are also separately calling for the creation of a board subcommittee made up of the two supervisors to further develop a county plan to respond to federal changes and turn the county’s behavioral health department into a standalone office capable of functioning as a Medi-Cal health plan.  

Lawson-Remer has emphasized that reserve funds can serve as a bridge but not a permanent solution to federal cuts and thus, the county also needs to explore options such as a county revenue measure to deliver longer-term solutions. 

All these proposals will face a divided board – and likely, hostility from local Republicans. 

In a statement, Montgomery Steppe told Voice she isn’t deterred by the possibility that board Republicans could kill plans to redirect reserve funds to bat back federal cuts. 

“We must move forward. Each supervisor will make decisions using their own authority and vote, addressing issues one at a time,” Montgomery Steppe wrote. “I will continue to fulfill my responsibilities, including updating policies to ensure we serve our constituents effectively.” 

In a separate statement, Lawson-Remer said she is hopeful her board colleagues will support the Democrats’ proposals. 

“Updating our reserve policy gives us the flexibility to act quickly and protect San Diegans when the federal government walks away, and I believe my colleagues understand those stakes too,” Lawson-Remer wrote. 

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