Humboldt County Still Facing $12 Million Structural Deficit Despite Brighter-Than-Expected Budget Picture
Humboldt County’s budget is better than expected in some ways but there’s still a $12 million structural deficit and ability to cover it is expected to last only one more year.
A mixture of pluses and minuses in last year’s budget and the first three months of the current fiscal year was described during a Dec. 16 Board of Supervisors presentation.
The 2024 to 2025 fiscal year ended with a General Fund balance $7 million higher than expected.
But other fund balances, including the county’s Roads Fund and Aviation Fund, are running deficits, as is the Department of Health and Human Services.
Between one-time revenues and savings, the county budget is in better shape than projected.
Supervisor Natalie Arroyo nodded to the “efforts of all of our team to really buckle down and do what we can to improve the outlook” but also flagged something not included in a staff PowerPoint presentation — a $12 million structural deficit.
“I’m always intrigued when this gets reported as making it seem like the county does not have a structural budget deficit, like we somehow have money to give out,” she said. “When I see the reporting kind of framed that way, I’m like, ‘oh no, that is that is not the picture at all.’”
And a written staff report details another troublesome scenario.
According to the written report, federal budget actions mean “counties face substantially greater administrative responsibilities and costs” for the SNAP food assistance program starting in 2026.
That and Medicaid eligibility changes will be “impactful to community members and community service organizations” and” will affect the county’s ability to deliver services, primarily in the Department of Health and Human Services.”
The state is also affected and is expected to have a budget shortfall in 2026.
The written report also says that in April through June of 2025, “the county as a whole was down 2.1 percent in adjusted sales tax,” with the unincorporated county area down 3.4 percent compared to the same period last year.
But less sales tax revenue doesn’t reflect an across-the-board slump. Fuel and vehicle sales saw drops of 8.2 percent and 15.5 percent, but the restaurant and hotel sectors actually did well, with six percent revenue increases.
The overall sales tax decrease offsets some budget gains, however, and although the deficit can be covered through forwarding the positive fund balance built up in previous years, a reckoning looms.
The situation was aptly summarized in a discussion between Arroyo and Assistant County Administrative Officer Jessica Maciel.
“If we have a structural deficit around $12 million and we’ll have a fund balance of a little over 14 (million dollars) … then we can cover one more year of what our structural deficit is before we really are up a creek,” said Arroyo.
“Correct,” Maciel replied.
Arroyo described the deficit as “very concerning to me.”
Up for approval were a series of budget adjustments, including library and District Attorney’s Office funding reductions.
Supervisor Michelle Bushnell noted the budget’s flat-lined condition.
“While it looks a little bit better, we still are in not the greatest position and we’re still at a status quo budget,” she said.
Noting the county’s 10 percent staff vacancy rate and hiring freezes, Bushnell said while the budget “looks better,” there are cuts affecting residents.
“I want to recognize the loss that they’ve had, as well with county services, because we are implementing all these items,” she continued.
Supervisors unanimously approved the staff-recommended budget adjustments. Supervisor Steve Madrone was absent, with Board Chair Mike Wilson explaining that Madrone had to leave to take an important phone call.
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It’s almost as if driving out the cannabis growers with really high taxation was a bad idea or something
Almost as bad an idea as not taxing the crap out of them when they were illegal.
Oh, they definitely taxed the crap out of everyone with property in Humboldt County…
That’s for sure…
They jacked up assessments way beyond reason, every single chance that they got…
It was taxed when it was illegal. To possess it required a federal tax stamp. Of course the government refused to issue any such tax stamps.
This holiday season has been really heavy. I’ve been watching people who were doing okay just last year now needing to rely on food banks. People who were employers now not able to feed their own families and the employees without work and worse off. Visiting the artisan and craft markets has been one of the saddest experiences I’ve had in my 40 years in Humboldt, these mainstay holiday events are nearly empty. Our local economy is struggling in a way I’ve never seen.
It’s time to stand behind our farmers and small producers like never before. We need to streamline regulations, offer tax relief and forgiveness and expand access to direct sales through no‑cost, deferred, or grant‑funded microbusiness licensing. On‑site consumption, simplified permitting whatever it takes to keep people employed and keep our community alive.
Waaaaaah, bot! You all good. Growers had their chance to contribute but chose not to. Now you cry about taxation.
I believe that farmers (non-green rushers) contributed significantly to our community and culture. The statistics I’ve seen indicate that 40–60 percent of our local economy was tied to cannabis prior to 2016. Because of that, we were largely shielded from recession, and small businesses locally owned restaurants, mechanics, grocery stores, and many others were able to thrive.
I also recall estimates that around 15,000 jobs were lost due to legalization, taxation, and over‑regulation. This isn’t just about “growers,” per se; it’s about the overall economic health of our region. We don’t currently have another viable industry to replace what was lost, if you haven’t noticed.
Perhaps some people are comfortable watching others struggle, but I’m not. I’m an empathetic person, and I want our children to have a better future. Whether people like it or not, cannabis sustained this area for decades. What we need is a regulatory framework that supports the right kind of scale we can’t compete as a commodity, instead one that protects small operators by supporting added value manufacturing, direct marketing, and shipping. Those are all possible and the county should work on providing grants or waivers to kickstart that process.
I am crying for those who have not made it through this, it does weigh on me, and I’m scared for the many who are struggling.
Oh and what makes me even more mad is that this is the wording that the voters voted or on the ballot for this tax Measure S– “Shall the County of Humboldt impose a commercial marijuana cultivation tax of $1–$3 per square foot of cultivation area, depending on the type of grow, to fund county services including law enforcement, environmental protection, mental health, child abuse services, rural ambulance service, emergency communications, and cleanup of environmentally damaging marijuana farms, with annual independent audits and public review?” AND instead, we got county raises across the board, retirement, and a new roof on the jail? it was never used for the public good. Drug addiction and homelessness is worse than ever just imagine if we had invested in mental health treatments and child abuse prevention. And we still don’t have an Audit that has been made public for the use of any of the measure S funds
Vehicle sales down 15%?
Arroyo?
I wish every county had a great news blog that shows what a bunch of idiots have been elected to sit there and draw $100,000 salaries while screwing everything up…
I, personally, will not make purchases in area with extremely high Sales Tax… Like San Francisco, and Eureka…
These people are interesting, like something out of the 1950’s… And is that an apron Natalie’s wearing?
Arroyo was embarrassingly stupid as a City Councilmember, but now, she’s not much of a leader…
If you have a 12 Million Dollar Deficit, hmmmmm, what should you do?
Change the name to something else that sounds better!
You need all new people, and your Supervisors have no clothes…
Most Corporations will sever ineffective employees…
Humboldt should try this…
Your Supervisors are really bad at their jobs…
Like my Dad said:
”When times are tough, cut staff, cut costs, or grab whatever you can and cut out…”
They’ll all be replaced by robots anyway before it’s over. Almost zero overhead and zero errors.
You half right about the outcome and certainly right about the future of civil service. Besides would u ever trust a politician again after we know what they think and do behind closed doors? But the algorithms are just word guessers that can’t even understand thr words they guess, tokens they say
“If you have a 12 Million Dollar Deficit, hmmmmm, what should you do?”
__________________________________
Well, POM, what the Humboldt County Supervisors have done in that situation is…
Taken $20 million in basically defaulted Measure S and cannabis permit debt, pulled some strings, and converted as much as possible of it into “Pie In The Sky” “Wishful Thinking” “4 Year Payment Plans”, that they can then basically fraudulently or at least irresponsibly include the now supposedly no longer defaulted debt, magically, into the accounts receivable column, in order to falsely represent the county budget is in way better shape than it truly is, basically offsetting the sales tax revenue they lost…
The supervisors “cooked the books”, by floating a 4 year loan to a bunch of proven welchers, “magically” turning much of a proven $20 million loss into “accounts receivable” instead, and covering for the sales tax revenue lost, so the county could keep spending money at the same already unsustainable rate….
Because having to make the necessary budget cuts, (that they are avoiding by “creatively” turning defaulted Measure S debt, and defaulted Cannabis permit debt, $$$ that will actually and realistically remain never to be seen), would make them wildly unpopular, and it’s an election year…
The supervisors don’t care about each taking turns, carelessly spilling everyone else’s coffee, but the very last thing that they are willing to do, is to take a turn that results in, or even risks, spilling their very own fucking coffee…
I like the way you think…
well, easy to understand, here of all places, why one usually likes how the other tinks .
Most insightfully detailed response award goes to this comment
The cannabis taxes will never arrive, like blackrock they gonna have to admit those assets are liability
I can’t speak for how good she is as a council member but I got to work with her a bit when I worked along side the ink people and she certainly doesn’t deserve the vitrol.
Ink people?
What you need is “think” people…
Your Supervisors dance on air, and it is getting thin…
Or is it ice?
Yes she does. She talks out of both sides of her mouth.
IMHO:
Preparing the ‘sheep’… for another TAX INCREASE !!!
Measure ‘Double-O’ (ala… Buckshot). Probably another 2% on the SALES TAX.
>”If we have a structural deficit around $12 million and we’ll have a fund balance of a little over 14 (million dollars) … then we can cover one more year of what our structural deficit is before we really are up a creek,” said Arroyo.”
Hint: You are already ‘well up the creek’.
>”According to the written report, federal budget actions mean “counties face substantially greater administrative responsibilities and costs” for the SNAP food assistance program starting in 2026.”
Apparently.. half the county’s population (?) is receiving Food Stamps.
Pass out hoes, shovels, raincoats and cabbage seeds.
Taters grow pretty good too.
North Korea… here we come !
Yep…
The County, which has long been run by these buffoons, is a truck or whatever headed for a fiscal cliff that drops into being Up Shit Creek…
Get these wrecking balls out from behind the wheel, and take away their County “driving privileges”, before they try and take away any more of ours…!!!
Mike Wilson, etc al, need to immediately start getting their coffee refills in tippy cups, because they really need to immediately start taking turns radically altering their current fiscal course and trajectory…
Yep…
Tax Measure Two point “O”…
AKA…
Tax Measure “XS”…
When was the last time any government lived within its means? Or was respected for it?
1912.
This is the truth of the matter ^^^
Sales tax did not decrease, unfortunately…
Sales tax revenue decreased, unsurprisingly, not the sales tax rate percentage…
“The overall sales tax decrease offsets some budget gains, however, and although the deficit can be covered through forwarding the positive fund balance built up in previous years, a reckoning looms.”
vs
“The [RECENTLY INCREASED BY 1%] sales tax [SALES TAX REVENUE 2.1% DECREASE], offsets some budget gains, however, and although the deficit can be covered through forwarding the positive fund balance built up in previous years, a reckoning looms.”
______________________________
Of course big ticket purchase items like new car sales promptly exited the county…
By raising the sales tax in Humboldt County, the “powers that be” basically said,
“We are making sure that you can save $500.00 off the sales tax of the purchase price of your next $50,000.00 new car, just by you leaving Humboldt County to do it, and we are doing it by costing ourselves $450.00, every damn time…!!!”
It ain’t rocket science…
The County thought they would gain 1% across the board, but instead, they lost 9% on every big ticket item that people naturally went elsewhere to purchase…
Totally predictable, but not when your county supervisors are so blinded by greed, that they actually made a great deal of effort, to actually lose more than twice as much money as they had hoped to simply and effortlessly gain…
How much did those election materials and the election also cost the County…
Hint:
It’s Mike Wilson, and the supervisors that are “taking turns”, yet driving the truck that is Humboldt County over the cliff…
Hint:
Mike Wilson, et al, I already can’t afford any coffee to spill…
So, maybe pick a different analogy…???
It should come as no surprise to anyone that a 1% sales tax INCREASE, would naturally and IMMEDIATELY result in a 2.1% DECREASE in sales tax revenue…
That just very basic ECON 101…
If our Supervisors had any sense, they would have DECREASED HUMBOLDT COUNTY SALES TAX BY 1%, BRINGING PEOPLE FROM OUT OF HUMBOLDT COUNTY, INTO HUMBOLDT COUNTY, IN ORDER TO MAKE THEIR PURCHASES AND BIG TICKET PURCHASES HERE, INSTEAD OF SO FOOLISHLY INCENTIVISING HUMBOLDT COUNTY RESIDENTS TO LEAVE THE COUNTY TO SHOP, IN ORDER TO SAVE MONEY…
BY RAISING THE SALES TAX IN HUMBOLDT COUNTY, THE SUPERVISORS AND THE POWERS THAT BE, DID A GRAVE DISSERVICE TO OUR BUSINESSES THAT TOOK A HIT IN SALES BECAUSE OF IT, AND TO THE GOVERNMENT FOR WHICH THEY WORK, BY THE RESULTANT LOSS IN SALES TAX REVENUE…
TRY LOWERING IT TO ONE PERCENT BELOW NEIGHBORING COUNTIES, NOT INCREASING IT TO ONE PERCENT ABOVE NEIGHBORING COUNTIES, you buffoons, and see what happens to the overall sales tax revenue…!!!
EVERYONE THAT FOOLISHLY VOTED FOR THIS TAX INCREASE IS ALSO RESPONSIBLE FOR THE PREDICTABLE RESULTANT LOSS IN SALES TAX REVENUE…
TAKE A BOW…!!!
Yes
The High TAX rates are damaging the county’s income. Buy gas at the casinos. Buy stuff form Amazon. (that tax goes to Sac) Buy stuff in Oregon.
The HHS and other social spending should be last on the debit page. Its all charity. And not very efficient at that.
Reward the TAX payer. People who pay TAXes should get something for that taxation. Funding county pensions is not something for ME.
I refuse to buy in eureka with its high sales tax. I have an address in fortuna so I buy there or online and ship to fortuna. That’s only 8.5 % and NOT 10.25 %. This isn’t rocket science. If you buy a car or anything expensive in Eureka you are paying for more sales tax.
Sales tax in Fortuna is currently 9.5%. Too damn high.
I would love to buy a new car but I will be damned if im going to pay 5000 in sales tax, 1000 yr in registration and 1000 more a year for insurance to save 1000 a year on gas. For other necessary big items, ill just drive to oregon, combine shopping with a road trip.
Sounds like the ‘ol ‘we don’t have a spending problem, we have a revenue problem’.
every time they get together, they create more ways to take our money and grow the size of the government. the general fund has plenty of money. that’s where their paycheck come from. once the people’s money runs out or they are all in jail for breaking some stupid rule, then and only then the county will collapse. but until then the members of the counsel will be doing quite well.
Budget is in better shape with savings attributed to actions by the board, including voluntary furloughs, separation incentives, and hiring freezes, But how does this translate to services provided? 2023 to 2025 saw a loss of 119 staff at DHHs, with loss of 77 more DHHS staff scheduled for FY 2025-2026. HumCo has a staffing crisis at the District Attorney’s office and a staffing crisis at the Public Defender’s office. HumCo has $100 million a year worth of road work needed over the next 5 years, yet the new tax increase only brings in $24 million per year. With the report saying “It is critical for your Board and departments to keep this course” we will have to wait and see what future cuts will be made and how these cuts will impact the community.
Replace them all with software?
The salaries of the high level employees are atrociously high
https://lostcoastoutpost.com/2025/dec/8/humboldt-county-has-nations-second-riskiest-housin/
Humboldt County Has the Nation’s Second-Riskiest Housing Market, Industry Report Finds
Its easy to tell who is up for re-election and who this news outlet promotes. Could you find a better photo and talk about her any more in this article?
These representatives have a total inability to cut cuts and balance a budget.
I’m waiting for them to say they need to use the new 1% sales tax hike to shore up the budget. Maybe that’s why they didn’t want it specific to force 60% vote, because it’s in the general fund