County CEO attempts to slow the budget bleeding

County Executive Officer Carlos Palacios at a December 2024 meeting of the county board of supervisors. Credit: Kevin Painchaud / Lookout Santa Cruz

Tomorrow, Santa Cruz County’s elected lawmakers will decide whether they are okay with the significant shifts to public health proposed by staff. 

Much hangs in the balance of the board of supervisors’ vote. To meet fiscal challenges, the local Health Services Agency has proposed about 12 layoffs as part of a larger effort to slash 74 positions from the county’s workforce.

The agency also sought to save money on a number of programs that directly serve the county’s most vulnerable: closure of the area’s only peer-run day center that serves a mentally ill and largely unhoused population; shuttering of laboratory and radiology services that draw blood and take urine samples and X-rays for uninsured and chronically unstable groups; ending a contract with an organization that offers transitional living for formerly incarcerated women re-entering society; cuts to an outreach program directed toward the county’s homeless. Slashed reimbursement rates from the county have led to the shuttering of one mental health residential center, with another one threatening closure. 

Since April, the board of supervisors have been asking for alternatives to the reductions. In two budget updates since then, rather than offering another route, HSA’s then-director Monica Morales told lawmakers her original proposal represented the best option. 

Morales’ last day leading the county’s health agency was June 3 (her departure to Yolo County for a similar job was, by all accounts, unrelated to the budget troubles in Santa Cruz County). Now, as the supervisors prepare their final decision Tuesday, County Executive Officer Carlos Palacios has jumped in at the 11th hour with a plan to slow some of the bleeding. 

Late last week, Palacios proposed an alternative route that would save the peer-run day center — Mental Health Client Advisory Network (MHCAN) — as well as extend the county’s laboratory services until Sept. 30 to allow for a longer runway to transition to private providers. Palacios also recommended reviving the funding for a South County syringe cleanup program, and restoring a senior mental health specialist position and contracted psychiatrist position in South County. 

The roughly $1.4 million reshuffle would pull $500,000 in general fund money intended for a Capitola Road culvert project, and about $400,000 from Measure K’s new sales tax revenue originally intended for housing-related initiatives. The remaining funding is anticipated to come from Medi-Cal reimbursements.  

Under Palacios’ proposal, cuts and closures would still come for the county’s radiology services and the downtown homeless outreach program, and layoffs remain in play, though those related to the laboratory closure would get delayed. 

“These targeted restorations will preserve essential health and community services, support vulnerable populations, and ensure a coordinated transition of certain functions to community providers,” a board memo from Palacios’ office reads. 

Rising costs, red tape squeeze small biz in downtown Santa Cruz: A mix of rising rents, construction hurdles and slow city permitting is prompting some small businesses to reconsider opening in downtown Santa Cruz. My colleagues Lily Belli and Jessica Pasko teamed up for a deep dive into how local business owners are feeling the crunch, and the impact on downtown Santa Cruz.  

Clocktower Center passes, but only with a yellow light from the Santa Cruz Planning Commission: The Planning Commission unanimously approved the downtown Clocktower Center project Thursday, but its rejection of developer Workbench’s request for more balcony space on lower floors opened the door to litigation.

Public defender condemns “state violence” against ICE protesters: Amidst the violent confrontation of protesters and law enforcement in Southern California over the weekend, Santa Cruz County Public Defender Heath Rogers announced on social media that she had signed onto a letter from the California Public Defenders Association that “strongly condemns” recent U.S. Immigration and Customs Enforcement raids and “denounces the use of violence and intimidation by law enforcement against protesters.” 

California legislature hammers out budget deal: As part of the deal, which Gov. Gavin Newsom still has to approve, lawmakers in the state assembly and senate agreed to soften the budget’s expected blow to Medi-Cal holders by lowering proposed monthly premiums from $100 to $30, allowing a six-month grace period for those who fall behind on payments, maintaining the same limits on total assets ($130,000) instead of lowering it to $2,000, and doing away with proposed cuts to dental and in-home and long-term care. My colleague Max Chun was in Sacramento with a local group of advocates as the deal was finalized, and will have a story later this week.

Deja vu as Capitola City Council appoints interim lawmaker: For the second time this year, the Capitola City Council will appoint an interim city councilmember following a resignation. On Thursday, the Mayor Joe Clarke, councilmembers Melinda Orbach and Gerry Jensen, and interim councilmember Margaux Morgan will vote to fill the seat left behind by Alexander Pedersen last month. The city council will choose from a pool of 12 applicants. That meeting begins at 6 p.m.

Santa Cruz City Council vote to ban cigarette sales, adopt its budget and streamline downtown permitting: The city of Santa Cruz’s lawmakers will look to take the county’s lead in banning cigarette sales on the same day it votes to approve its citywide budget plan for next year. During the same meeting, council members will vote on a proposal to lower permitting thresholds for businesses looking to fill downtown spaces, as local leaders pursue further ideas to stimulate Pacific Avenue and its thoroughfares.  That meeting begins at 10 a.m. on Tuesday. 

The Arroyo Seco Canyon trail on the Westside of Santa Cruz is a great way to explore the wild places of the city without crowds. Credit: Kevin Painchaud / Lookout Santa Cruz

The quintessential Santa Cruz day, By Wallace Baine, for Lookout Santa Cruz 

Arts and culture writer Wallace Baine goes full lifestyle columnist as he explores the contours of what he considers the perfect Santa Cruz day — just in time for the summer season. 

When drumming up this piece, our newsroom expected a bounty of complaints about what Wallace includes, as well as excludes. To me, those complaints speak less to Wallace’s vision of a good time and more to the many layers of this corner of the country. This city, and this county, has more to do per capita than anywhere I’ve lived throughout the country.

So, sure, complain, criticize and scrutinize away (I’m looking at you, Reddit). But as you do, think about how lucky we are that this small place we call home has so many layers that various people can have their own “quintessential Santa Cruz day” and likely not even bump into one another. 


Over the past decade, Christopher Neely has built a diverse journalism résumé, spanning from the East Coast to Texas and, most recently, California’s Central Coast.Chris reported from Capitol Hill...