This article was written by BenitoLink intern Brea Spencer. Lea este artículo en español aquí.
Though San Benito County passed a budget in July that addressed an expected $30 million deficit without imposing major job cuts, a new audit shows the county requires additional cuts.
On Sept. 2 the San Benito County Board of Supervisors held a special meeting to review the findings of an external audit showing a projected $25.7 million budget deficit for fiscal year 2025-26.
The audit was requested by the supervisors to analyze ongoing budgeting issues from the last five years, and to receive recommendations on how the county can adjust moving forward, according to the County Administrative Officer Esperanza Colio Warren.
Warren pointed out that the county approved budgets that showed a deficit.
“All of the budgets were adopted with a deficit,” she said. “I have never seen that in my life. You balance the budget, you don’t come with a budget that is offset.”
The role of the auditing group, Baker Tilly Advisory and Assurance Firm, was to analyze the last five years of budget data and make recommendations for amending the adopted budget for fiscal year 2026.
This report is in addition to a previous report by Baker Tilly in June 2025, where it used data from fiscal years 2024 and 2025. According to their presentation, the firm “found chronic underestimation of revenues and over-appropriation of expenditures that distorted fiscal reality.”
“It does paint an unrealistic picture of what it costs to provide general fund services to the county and to the community here,” said Steve Toler, a director with Baker Tilly.
The new audit analyzed data from fiscal years 2021 to 2025 to identify the reasons for continued variances in the budgets leading to the forecasted 2026 budget deficit.
According to the presentation, “San Benito County has avoided crisis by underspending and receiving unplanned revenues, but this has masked recurring budgeting flaws and narrowed reserves.”
Matt Stark, a manager at Baker Tilly, pointed out that capital projects, like road repairs and the library expansion, were “chronically underfunded.”
Those underfunded projects led to projects which were never finished, which appeared to have come at a lower cost to the budget, but only because the projects were pushed out to the next fiscal year, Stark said.
For the 2026 budget amendment, Baker Tilly recommends creating a distinction between one-time revenues, such as grants, as compared to ongoing revenues, such as property taxes, in order to not rely on one-time revenues for regular expenditures. The firm also recommended practicing greater transparency for capital project funding and following through on capital projects once they are started.
After hearing the audit findings, the board discussed how to go about reducing the deficit. There was a split opinion, with Colio Warren and Supervisor Ignacio Velazquez suggesting a $25.7 million cut from the budget to avoid any deficit, and Supervisors Angela Curro and Kollin Kosmicki favoring a series of smaller, less drastic cuts, to eliminate the deficit over time.
“I will not be a part of a deficit budget,” said Velazquez.
The board is set to review recommendations from Colio Warren on Sept. 8 and approve changes to the 2026 budget that day in order to present its plan to the public by the deadline that same day.
That gives time for what Supervisor Mindy Sotelo suggested: finding out how this deficit will impact the county.
“You know, we’re talking about people. We’re talking about people’s lives. Not just our employees, but we are talking about impacts to this community,” Sotelo said.
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