As the Board of Supervisors opens discussions Monday on a proposed $758 million budget for next year, analysts predict a flood of red ink due to shortfalls in state and federal funding.

With the new fiscal year beginning July 1, the budget proposal comes up short by at least $1.2 million. Whether the gap between revenues and expenditures will continue to grow in future years rests on finding new funding sources and making tough decisions about what to spend.

According to County Executive Officer Mike Brown, Sacramento has frozen funding levels just as the county Social Services Department is experiencing a surge in client numbers.

In his introduction to the 450-page budget, Brown also noted that the state and federal government fails to provide the Public Health Department with a “balanced” reimbursement for medical services provided at county clinics and hospitals.

And then there’s the jail.

Budget analysts left out the $153-million proposal for a North County jail that would cost $19 million to operate each year.

Taken together, Brown said the county’s financial needs could force officials to consider new revenue-generating activities.

“The jail, social services and public health costs will result in other services having to shrink and/or new revenue sources, from urban or rural development or more extensive exploitation of our natural resources having to be developed,” Brown said.

Budget deliberations commence on Monday, Wednesday and Friday, at 9 a.m., in the county administration building, 105 E. Anapamu St. in Santa Barbara.