SANTA CRUZ — Millions of dollars in mental health services and dozens of positions are slated for elimination under Santa Cruz County’s proposed $793.5 million General Fund budget, prompting concern among health advocates and service providers.
County officials are scheduled to present the draft budget to the Board of Supervisors on Tuesday, ahead of a final hearing set for June 3. The proposal includes sweeping reductions to the Health Services Agency, with significant impacts on mental health care, support programs for vulnerable populations, and staffing.
One of the most significant cuts is the complete defunding of the Mental Health Client Action Network (MHCAN) — a peer-led nonprofit that has operated in Santa Cruz for over two decades. The $590,000 annual allocation from the county has enabled the organization to provide meals, hygiene services, health care referrals, and job assistance to people living with mental illness.
Without county support, MHCAN will be forced to close its doors, said Executive Director Tyler Starkman.
“Many of our members won’t go anywhere else,” Starkman said. “They only feel safe and accepted here, in this environment where they can be themselves.”
Starkman, once a client of MHCAN while unhoused and studying at UC Santa Cruz, described the organization as a lifeline during a difficult period in his life.
“This place welcomed me without judgment or fear. It gave me a space where I didn’t have to worry about stigma or law enforcement,” he said.
Other key reductions proposed for the county’s Health Services Agency include:
Elimination of 74 full-time health service positions, most of which are currently vacant. However, 12 full-time equivalent employees in mental health and clinical services face potential layoffs in June. Many of these positions are in X-ray and laboratory services, which the county plans to outsource.
A $3 million reduction in funding for mental health services provided to uninsured individuals, including psychiatric hospitalization.
Cuts of $330,000 to Gemma House, a transitional residence for women exiting incarceration.
Elimination of $180,000 in funding for the Downtown Outreach Worker team, which offers crisis response support in Santa Cruz’s downtown area. This comes despite the county’s operation of a 24-hour, countywide mental health crisis program.
A $135,000 reduction in syringe cleanup programs managed by the Community Action Board and Downtown Streets Team.
A full breakdown of the proposed budget is available on the county’s official website.
The proposed cuts come amid broader changes in state and federal funding that have strained local resources. According to a staff report, the state’s California Advancing and Innovating Medi-Cal (CalAIM) initiative — which had previously supported county-level mental health programs — has modified reimbursement structures, resulting in reduced payments for certain services.
In addition, revenue from California’s Mental Health Services Act, funded by a 1% tax on millionaires, has declined. Some of that money has also been redirected toward affordable housing initiatives.
At the federal level, reductions to Medicaid are expected to further constrain the county’s ability to provide services.
In a related development, Santa Cruz County Health Services Director Mónica Morales announced on April 25 that she will step down from her position effective June 3. County officials say a national search will be conducted to find her successor.
