Forum on local effects of funding cuts: Too early to tell, but bracing for impact

NEVADA CITY, Calif. June 5, 2025 – The League of Women Voters of Nevada County held a panel discussion yesterday on how federal changes and cuts are impacting Nevada County. Panel participants agreed uncertainty reigns with no federal budget passed yet and shared their plans on how they’ll navigate funding shortfalls if and when they materialize.

The speaker lineup consisted of Executive Director of the Nevada City Chamber of Commerce Lynn Skrukrud, District 3 County Supervisor Lisa Swarthout, Undersheriff Sam Brown, Sierra Nevada Memorial Hospital President Dr. Scott Neeley, Nevada County Chief Fiscal Officer Erin Mettler and Community Foundation of Nevada County ED Cristine Kelly.

Skrukrud kicked of the discussion by touching on the impacts of tariffs, “Tariffs are a huge impact on our community, creating and adding more to the inconsistency because they’re on and then they’re off. I just had a conversation today with the owner of BrewBuilt BrewHaus and they were notified this morning about a 25 to 50% tariff on aluminum and steel, effective immediately. They’re bringing the aluminum in for bottling their beer, the steel is for their kegs. So it’s a challenging time, I would say, with businesses navigating that.”

Shopping local supports the economy

Skrukrud said Nevada County is a little more insulated from impacts than some larger communities. A lot of businesses are focusing on sourcing locally, especially local restaurants. “We have a lot of restaurants that are sourcing their food locally in our community. A lot of our businesses are using local artists, more businesses are taking advantage of local services. But again, the raw materials often still have to be imported and are subject to tariffs, which can be different every day.”

On the importance of shopping locally: “As a Chamber, we’re working to support our members the best we can and help them navigate and educate them. But again, every day is different. Really just doing what we can to support them and also bolstering our local economy, encouraging our community to shop local now more than ever. I think that’s really important. If you can keep your money here in Nevada County, that makes a big difference. Not only does it keep our businesses alive and thriving, but it keeps our potholes filled and our police services available. It keeps those tax dollars here. So I’d say that’s really important. Just shopping local, supporting our local community however you can.”

Uncertainty is not good

Supervisor Swarthout, who represents Grass Valley and surrounding areas, zoomed out to the county level, stating “County government is very heavily supported by federal state grants often called pass through. The money goes from the feds to the state and then down to the county to run particular programs. I think what we’re going to see is certain programs are going to be cut and if you’ve watched the news, you can kind of tell they’re going after, in my opinion, the most vulnerable of the population by cutting Medicaid, SNAP and some of the other social services. We have not gotten a lot official words from the Fed yet because they don’t know – Congress hasn’t passed a budget yet. But, I will say just like business and the stock market, government is no different. Uncertainty is not good.”

Speaking specifically about District 3, Swarthout added, “I represent Grass Valley, which is the majority of the business community. You know, small businesses in western Nevada County, the majority are in the city limits of Grass Valley. The hospital is in the city limits, all the schools. My district, I think, is going to be particularly impacted on the business side. I’m a 30-year third generation retailer. That’s what I did for my real job back in the day before I became a county supervisor. I have a lot of empathy for what our business community is going through right now because there’s a lot of uncertainty. Are we going to have inventory on the shelves at Christmas? Small business runs on a very small margin. Covid was very, was very hard on our small businesses and now you tack on tariffs and access to capital.”

County programs

Some of the programs Nevada County is looking into is Area 4 Aging, Meals on Wheels and some of the other programs for our senior and disabled community Swarthout said. “I got an email yesterday that Meals on Wheels has been saved, which is really good news. They’re going to fully fund that to last year’s budget. There are some other programs like Falls Prevention and a couple other small programs that are funded through some federal and state grants that are probably going to be impacted. We are still in the very early stages of drilling down what the actual effects are going to be, but potentially it can be pretty devastating for a small rural community in our sector in small business.”

Sierra Nevada Memorial Hospital (SNMH) is here to stay, continues contributing to local economy

Dr. Scott Neeley provided background on SNMH’s revenue, explaining, “45% of our revenue comes comes from Medicare and about 25% of our revenue comes from the Medicaid program, which we call MediCal here in California. Those revenues are less than what it costs us to take care of the patients that are funded by Medicare and Medicaid. So, we are reimbursed at rates that are below our cost of care for those patient populations. We break even because we actually have a small but reasonable excess of revenues over costs for the 12% of patients who we admit who are funded by commercial insurance. So the overwhelming majority of our patients, 85% have government funding.”

The hospital contributes in excess of $100 million annually to the economy of Nevada County through the salaries and benefits SNMH pays to staff. Neeley stated, “We’re the largest private employer in the county by far. It’s estimated that in rural communities, every dollar spent on health care results in well over two and a half dollars in economic benefit to the economy of the county. When rural healthcare facilities are forced to decrease services or to contract, it oftentimes results in significant economic hardship for the communities in which these hospitals close or forced to reduce services. So economic hits to health care facilities, the health care system, are very wide-ranging.”

As to possible future impacts, Neeley declined to speculate, “I’m not going to speculate on things that aren’t facts, and we don’t have facts yet. One thing I will tell you is that we’re not closing the hospital, we’re not closing labor and delivery and we don’t have any intention of closing any clinical services at this time. We, as you’ve heard already, depend very heavily on federal funding of a different sort. It’s directed by patients. We also depend very heavily on patients who are commercially insured when they come to the hospital. I like the competing for grants language. I have to compete for patients and my competition is called ‘down the hill.’ My principal strategic approach to our financial challenges over the last few years has been to improve the quality of our product and to compete harder for patients. That’s the American way. I don’t have any plans right now for massive belt tightening. That obviously is always something that we could be forced into. But we have no intentions right now to do layoffs. Layoffs are not in our Fiscal Year 26 budget, we’re starting in fiscal year on July 1st.”

County’s Chief Fiscal Officer explains budget situation

Erin Mettler gave a broad overview of the county’s finances, “About half of our annual revenue is federal and state funding. Of that half, about a third of it is federal, about $60 million coming to us from the federal government each year. Those are primarily in our Health and Human Services departments, which are your Social Services and Behavioral Health programs, primarily through MediCal. We also have significant federal funding in our roads and transit division that helps us keep transit system alive and well, helps us meet electric vehicle mandates coming from the state. We do leverage our local tax dollars against state dollars, which is then leveraged against federal dollars. So it’s kind of a three-part funding source for a lot of those safety net programs.”

Domino effect

Any change to the formula allocation is going to impact the state’s allocation and that’s going to be passed through to the county, Mettler explained. “While we have local dollars that are available to maybe smooth out that impact in the case of a very sudden cut, we don’t have enough resources to completely make that whole and keep the service levels stable. From the county’s perspective, as we’re developing our budget for 25-26, we really are being very cautious about extending ourselves in particular ways that might not pan out in terms of that funding coming through.”

Contingency plans

“We have several contingency plans for ‘what if,’ as others have said before me. There’s so much unknown, there has been unknowns, there will continue to be unknowns.” Mettler continued. “As government, we’re obligated to make sure that we think thoughtfully about that before extending ourselves or if we are going to extend into a contract. For example, there’s language in contracts that speaks to what happens when the funding doesn’t come through. It gives us the ability to stop that work from happening, to pay for what we have and you know, costs that we have incurred at that point, but not have to go any further. So there’s things like that that the county government uses as safety nets, if you will, that will allow us to continue to service the county residents in our way that we can.”

Adapting to an ever-changing fiscal landscape

“It’s super difficult to hear these big huge billion and trillion dollar numbers on the news and equate that to Nevada County.” Mettler said. “What does that look like for Nevada County? When we talk about contingency plans, each of the departments that has state or federal funding is responsible for navigating their own budgets in terms of understanding the restrictions and the policy direction tied to those funds.”

Federal funding flips on and off, but the work must go on

Speaking specifically about the Office of Emergency Services, Mettler explained, “I was getting updates from their department head back from January through April. We had funding, we didn’t have funding. We had funding, we didn’t have funding. Now we have some funding, not all funding. We’re spending a lot of time thinking about things, talking about things. How can we get the work done if this funding doesn’t come through? Take the example of wildfire mitigation and preparation. We have a planning grant through FEMA that while we were able to keep that money, it was immediately kind of cut off and we had to wrap up the plans that we were in the process of creating.”

The benefit of having the plan is, if future opportunities for grant funding through the state or if the feds open up, the plan makes the county more competitive.

“When you’re able to tell the funding agency, this is what we plan to use it for, this is how we’re leveraging local dollars, this is the benefit to our community, you’re much more competitive because you can tell a better story,” Mettler said.

Other departments, such as Public Health department, lost some Covid funding unexpectedly, and very abruptly, back in March. “We were planning for that funding to go away next year. So we had to kind of scramble and say, okay, what’s being funded through that particular source and what other funding do we have to either supplement it, backfill it, or is it a contract situation where unfortunately, we have to plus a stop work order on the contract,” Mettler continued.

Some positive outcomes

“County layoffs are not contemplated in our budget proposal. Unless there was a catastrophic cut to a specific program, I don’t see layoffs,” Mettler said. “One of the benefits that we’ve seen is, we’ve gotten really good about knowing where our money goes and what things cost. We’ve gotten really good about identifying what is a need, what is a want and what is a nice to have. That’s nothing different than anyone with a lot of common sense would do for their own personal budget. But when you’re a government and we’re talking about $415 million, it’s a little tougher and also super important that every dollar that we put into our budget has a purpose, has been vetted and is a need, and also addresses what the community wants and what they have expressed a desire to have. We balance those needs and those wants against the resources that we have. So I think that’s been a tremendous benefit as a result of these threats of coming cuts.”

Nevada County’s proposed budget for the fiscal year 25-26 stands at $415.5 million. The budget is available for public review and comment at www.NevadaCountyCa.gov/Budget or at local libraries.

Editor’s note: Quotes have been lightly edited for clarity.