Humboldt’s Weak Economy Leads to Budget Deficit
Humboldt County Supervisor Steve Madrone
Humboldt County is in the midst of an ongoing sales tax revenue slump and once again is balancing its budget by forwarding savings from previous years.
A draft budget with a $12 million deficit was reviewed at the June 9 Board of Supervisors meeting. The county expects to spend about $12 million more than it takes in during the coming fiscal year, but plans to cover the difference with accumulated reserves, which county officials described as maintaining a balanced budget.
At $658 million, the budget has increased by 4.4 percent but increases in some pools of revenue, including property taxes and interest, have offset the additional General Fund spending.
But there’s an overall $12 million gap between expenses and revenue – the same deficit amount as the fiscal year that’s ending – and sales tax revenue has been declining over the last several years.
A written staff report says as of the last quarter of 2025, sales tax revenue for the unincorporated county area was down 3.2 percent compared to the previous year and it’s expected to drop by 2.1 percent in the coming fiscal year.
“The downward trend is likely to hold as consumers are impacted by the increase in fuel prices and the rising costs of household items,” the report says.
The deficit can be covered by forwarding savings built up in previous years but the written report says in the 2027-28 fiscal year, there will only be $2 million left of savings to forward.
The budget’s General Fund spending is increasing by 5 percent, reflecting salary and benefit increases that had been deferred for several years.
Assistant County Administrative Officer Jessica Maciel mentioned the deficit in passing, saying being at the same amount is “a pretty great position to be in given that we did get the 5 percent increases in General Fund allocations.”
But Supervisor Steve Madrone wasn’t as upbeat. “This is never easy, cutting costs for services,” he said. “It’s a horrible place to be in for all of us.”
He warned there’s a limit to how long the county can spend more than it takes in.
“We’re considering passing a budget that spends money we don’t have, which I have a serious problem with, frankly, just from a philosophical and an economic perspective,” Madrone said. “I realize that it ultimately ends up somewhat balanced because of the fact that we don’t spend all the money – just to put it real simply, I think that’s kind of what we’re doing.”
“The budget is in fact balanced, you’re essentially using your savings account to fill that gap,” said County Administrative Officer Elishia Hayes. “So I just want to be clear that it is a balanced budget and you are spending at this point within your means.”
She added, “But as we whittle that savings account down times will certainly get tougher.”
That’s the point Madrone was making and he said it’s a “scary” situation. “The trend ever since I’ve been in this position is that it’s gone down and gone down and gone down and it only can go so far,” he said.
Supervisor Rex Bohn acknowledged the budget’s spending increase. “I’ve sat through fourteen of these and I think my original budget was $278 million and I ran on a platform of holding our costs in check and lowering them,” he said. “So I’ve almost tripled it. So how am I doing so far?”
He said Humboldt is “in the same boat as almost every other county in the state” and at a recent convention of the California State Association of Counties, “Everybody was screaming the blues.”
Several departmental funds have negative balances, a persistent issue described as “a threat to the General Fund.”
And Maciel said federal cuts will lead to “increased pressure on behavioral health” and “higher demand for housing, homelessness and social service programs.”
A public comment period had no takers. With the potential for future service reductions, Supervisor Natalie Arroyo supported doing more public outreach to tap community opinions on priorities.
“Unless things magically change quite substantially, this is the last year where we’re working with this amount of reserves that we can apply to the budget,” she said. “We’ll have some in subsequent years but not not this much and I think it would be really interesting to have folks bring back some ideas on how we could get some additional methods of input to see what’s most important to our community.”
Supervisors approved some adjustments to the draft budget, including inter-fund loans and continuing a hiring freeze.
The budget is set for approval on June 18.
Madrone said he won’t vote to approve it due to a single item that’s small in dollars but has big implications – the $21,000 a year it costs for the Sheriff’s Office to maintain the controversial license plate cameras it uses.
“I wish that the sheriff would recognize the public opinion on that,” said Madrone.
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Humboldt leadership is some soft headed tax happy morons. Good job running the pot trade into the ground, you literally made humboldt just another hick ran county with no income.
Weak leaders, corrupt and incompetent…
Missed the bus years ago…
Waste the money until you need Federal Rescue…
It’s the American Way…
Maybe things will “Magically Change”! It’s the Democrat / Progressive Socialist Way
Humboldt can’t change, doesn’t want to…
“Reverse Evolution” in action…
Ignorant Hicks in a fog of Pot Smoke, just don’t care…
You’re either on the bus or off the bus,
But the Bus will arrive without you…
Exactly the same problems in every other small town and rural county…
Over the last ten years the County has made real choices that especially affect the unincorporated regions of a mostly unincorporated county. Property tax increases are outpacing actual market values of properties. Imagine if…while WE all pay increased fuel and transportation expenses, and universal inflation, the Supes shared the hit and passed on the $7,000 increase in travel compensation, and instead of a raise, took a reduction in salary to better understand the vibe on the street…
Yes!!! I’m sure you have vigorously advocated for those same requirements for Democrat Socialists in the US Senate and House of Representatives!
It really doesn’t make sense that the County of Humboldt Supervisors just approved the purchasing of the old Kmart Building for $5.75 million, considering their $12 million budget deficit, which the Supervisors have also approved, which really doesn’t make sense either…
Yeah but permitting brings in a lot of money, so they look at the “One Stop Permitting Center” as a way to more efficiently take people’s money. It’s like an investment.
Maybe some successful business consultants can come in and review the model that has been in place for many years and show the leaders of the state and county how to create revenue and live within the means of its production.
Those “consulants” don’t work for free.
Fully aware of that and fully agree with your reason. I’m just saying if long ago you had someone who say was involved in the business model of something like In and Out, a California company that started from nothing and reached the heights it did, along with the reason their headquarters is now moving to Tennessee (I believe) should have more than enough experience with these issues to help reverse the model that continues to be used and successfully lead in the future.
IMHO:
There really is no economic basis of survival here.
As far as I can tell, (the number vary), 50% to 60% of the county (children included I guess) are on food stamps.
Few sawmills, (National Forests are either ‘locked up’ or are burned to a crisp), some dairy in the river bottoms, no fishing, old ‘cattle’ economy is taken over by huge Central Valley feedlots, there are a few ‘legacy’ enterprises. Then of course there are the wealthy SF/LA residents who come for a few months to distribute largesse.
Rest of the economy is either THC drug production (dope) money which largely based on illegal exports… or the ‘funny money’ shoveled in by the state/federal governments which is soon to be ‘inflated’ away.
Natural economy of the county… maybe 20K persons.
Go figure.
I believe that would be the model that has resulted in the current “Gravy Train” business. It is a huge business…..
“There really is no economic basis of survival here.”
This is the simple and stark reality for the vast majority who foolishly attempt to make much of a life in Humboldt County except for a truly rare few among us.
The people of Humboldt County fully deserve the inept government, widespread poverty, and pervasive substance abuse that they have been party to for decades and decades and decades.
The businesses have moved to Texas and North Carolina!
Well there’s a word very seldom used around these parts; Production. Maybe we should drag it out and dust it off.
Deflock.org can show where all the surveillance cameras are.
They are a huge violation of your right to privacy.
TAKE DOWN THOSE FLOCKING CAMERAS MR. SHERIFF
Ri-i-ight. They discourage the only profitable enterprises supported by Humboldt Co government- crime!
Bohn said: “at a recent convention of the California State Association of Counties, “Everybody was screaming the blues.”
California is the fifth largest economy in the world. It seems like there would be more prosperity for the counties. It is obvious the the whole state is mismanaged by a bunch of bickering politicians. We need an administration with a little more business acumen.
Even socialism needs some sort of income. Maybe repair the Humboldt harbor, and build a railway and transportation system to connect Humboldt to the rest of the United states.
Poverty is the worst form of pollution.
For the young and dreamy Progressives… this is where/why the phrase: “The chickens have come home to roost!” was invented.
The fleecing of the county/state etc is ridiculous! Just drive up n down the 299…5+ days to replace a culvert…1 year+ to fix the highway at the north fork (Mad River)bridge…yada yada yada – and to think this is going on state/county wide 24/7! If gov was run like a real business things (wa$te) would be much different!
Ca leaders don’t care about Californians. They just care about lining their own pockets with taxpayer money. CA politicians are either equally or more greedy than the politicians up in DC.
Ernie, just to set the record straight, you were close, California is the 4th largest economy in the world.
The strange one is buying the old Kmart for 5mil plus, then taking five to seven years to move into it, still paying rent.
In the city, cubicle offices are set up in days not years. Kmart has bathrooms, you can bring the microwave and coffee pot from current rented locations. The county already owns the desks and chairs. File cabinets are passe. Cube out a quarter of the space, put up dustwalls. Remodel 3/4ths while working in 1/4th and actually save some money on rent. Otherwise you’ll spend five to seven years lily gilding the backroom buildout for the privileged few.
It’s only an office, my dudes, not Schneider’s or Surveyor’s houses. Everybody builds out offices in a month, except you. The County that let Planning destroy our economy is now on schedule to let the same department blow up our budget for five years? Why?
John Ford should retire for real and let younger management take over. Five years to build cubbies? The internet wiring will be out of date before any county employee gets to use it. Five years? Parking lot will need another hit. The longer the county slugs around on this, the worse it gets for the taxpayers. Remember us? I get tax mail twice a year that suggests they do. But it’s the only time we get anything other than mug shots coming and going from the Fl*cked up cameras that Mr. Antifabusses loves so much. Go Steve!
Thank goodness the BOS and the CAO doesn’t manage my finances. The BOS relies on the CAO for fiscally responsible advice. She is failing the BOS and the public. The County is facing a projected $12 million deficit for the second consecutive year and is relying on dwindling reserves to balance its budget. With sales tax revenues declining, personnel costs increasing, and uncertainty surrounding future state and federal funding, the County should focus on restoring long-term fiscal stability rather than committing to costly discretionary projects. The proposed acquisition and redevelopment of the former Kmart building represents a significant financial obligation at a time when reserves are being depleted. Before moving forward, the County should demonstrate clear, measurable cost savings and operational efficiencies.
Financial experts and government finance organizations generally recommend maintaining unrestricted reserves of at least 15% to 20% of annual operating expenditures, with higher levels often warranted for rural counties that face economic volatility, wildfire and earthquake risks, and dependence on state and federal funding. Adequate reserves are essential to protect core services, respond to emergencies, absorb revenue shortfalls, and avoid future service cuts, layoffs, or tax increases. Fiscal responsibility requires aligning ongoing expenditures with ongoing revenues and preserving reserves for true emergencies rather than using them to support ongoing structural deficits.
It’s not often I agree with Madrone, but I agree in eliminating the $21,000 it costs for the Sheriff’s Office to maintain the controversial license plate cameras it uses. I’m sure this is just one of hundreds of little expenditures that add up to big dollars. Take care of the pennies, and the dollars will take care of themselves—a principle that applies just as much to county government as it does to a family budget.
When government starts competing for the same dollars that businesses rely on to create our local economy, we have a structural problem. Taxes aren’t bad, Business isn’t bad either, Regulation doesn’t have to be punitive or destructive. We’ve built a regulatory and tax structure with bias and a punitive attitude toward the very sector that once drove our largest local economy. Yes, the market is in the gutter right now , but that’s because we’ve locked small farmers out of the one thing that has always saved rural agriculture: direct marketing. Remove the distribution requirement, allow farmers to sell directly, and the market stabilizes.
This is true across the entire country. People want to support small businesses. People want to support their neighbors. If every vegetable farmer at a farmers market had to run their produce through Costco or Safeway distribution before selling, they’d never survive. They’d never get shelf space. They’d go under. Not to mention distribution has a poor track record of paying everyone. In fact we know due to leaked footage that it was actually some of their buisness models to not pay small farms they knew they could push out of the market. Zero accountability.
Traditional economics simply does not apply cleanly in rural farming communities. When any one party ,government, large operators, or politically connected entities, takes too much, they’re not just “winning.” They’re taking from everyone else. It’s a delicate balance. The obscene wealth accumulated by a handful of legal growers didn’t appear out of thin air; it came from market share stripped away from their friends and neighbors, aided by unequal representation, selective permitting, stacked grant funding, and insider connections. Add to that the unequal tax enforcement small mom‑and‑pop farms squeezed to the bone while large operators got deferred payment plans and you get a system that was never designed for fairness.
Then there’s the CAO who took funding that was explicitly meant to prop up our farms and used it to pay down government debt. TRELLIS dollars were designed to stabilize farmers, not plug holes in a mismanaged budget. And while that was happening, the Planning Department was allowed and in some cases encouraged to continue harming farmers through punitive enforcement and impossible compliance demands.
The CAO has been giving terrible advice for years, and when that advice was challenged, she helped orchestrate the removal of our elected Auditor the one person trying to restore checks and balances and protect restricted funds. That should alarm everyone.
Through abatements, over‑taxation, and aggressive enforcement, the county took such a large slice of farmers’ revenue that there was nothing left to reinvest in compliance, environmental improvements, or basic operations. That is how you hollow out a rural economy. Not through “market forces,” but through policy choices.
I’m proud of Supervisor Madrone for finally drawing a line. And I’m genuinely grateful for his work on trails one of the few public investments that actually benefits rural communities instead of extracting from them.
If we want a functioning rural economy again, we need to tighten this system, not keep doubling down on the parts that broke it. It’s time to lean our government, not our communities.
I’m proud of (lame duck) Sun Gnome for “finally” drawing a line. Finally!!! Someone toss him a crutch to limp off into the sunset.
But he defends the spy in the sky satellite software program, to the tune of just short of 1mil annually, to bust out the hinterland grows, that have pretty much folded their tents and moved back to Wisconsin or Bulgaria or…? Can’t we just use some upgraded Google Earth or similar for a tiny fraction of the cost?
I have an idea and I hope people weigh in on it negative or positive feedback. Humboldt could stand apart and fix the economic crisis we’re in, we need to decide whether we support small farms or continue propping up predatory systems that hollowed out our rural economy. I want to see my craft farmers be able to succeed, I want my people and culture to stop suffering!
Let’s convert the vacant K‑Mart into a farmer‑run cannabis marketplace and public‑benefit distribution hub, modeled after the USDA‑supported agricultural co‑ops, state‑run alcohol distribution systems. The government will get what they want, we could ensure that we only support ecologically responsible producers, and the small farms will have some protection. This isn’t a new idea its been used by small farmers nation wide to prevent predatory distribution from destroying local economies.
Pair it with a county‑supported fleet of compliant distribution vans to reach statewide retailers, and Humboldt finally restores the market access that biased permitting, selective enforcement, and diverted relief funds stripped away from small farmers.
This model stabilizes rural incomes, fills a major commercial vacancy, generates new revenue, and actually grows the economy instead of squeezing the same people who have been carrying the burden. If we want a future, we need to unify around an economy that supports our farmers.
Please weigh in. Lets have a productive conversation
I’m weighing in – I’m convinced the rest of the Country (Federal) and California State will support subsidizing Humboldt County with their tax dollars!
I like your enthusiasm. But I hate this corporate-friendly “legalization” and I see problems ahead for this model. Because it makes sense it will be opposed, smeared and attacked by any bigger farm that might lose profit. Face it- despite the bullshit METRC system falsely applauded by the Dept of Cannabis Control our weed business here is mostly dependent on black market sales out of state. Even Glass House is doing that. The production of weed by permitted farms in CA is running about 5 times what the people of CA buy and consume. So…it’s mostly going to the black market. From the permitted scamming “track-and-trace” farms. That is a problem with your idea, unless you plan on using this co-op as a huge laundering and mislabeling and illegal export hub. That’s just #1 problem- the CA market is very over-saturated. And expect major interference and problems from mega-corp businesses such as Glass House if your idea makes any inroads into their profits- even a dime. Due to the way our CA corporate-friendly “legalization” was written and due to the policies of The Department of Cannabis Control (all members appointed by winery boy Gov. Newsom) you are playing on a very slanted board. And good luck getting any media to cover your plight- they all championed this corrupt “legalization” because they were told to by their corporate ownerships. Sorry but it’s been Game Over now. Submit to The Borg. However…if you choose to fight and start making noise then maybe just maybe you may find allies…Good Luck! Your own county supervisors sold you and all your neighbors out and they still do not care…
Personally I think an approach that addresses the over-production of permitted farms would be most helpful. Massive pressure must be applied to Cannabis Control to develop a regional system of fair production limits. Good Luck with that! It’s obvious that the massive overproduction from CA permitted farms is the supply for the black market distribution across the country. The Feds should be pressuring CA Cannabis Control on that. But we have so much money now invested by Mega-Corp BigWeed interests that will be resistant so again- Good Luck! The small people voted away any power they had in the false ideas of “freedom” and “safety”. And now everybody is left hoping for the scene to bounce back up as their savings diminish….but we have not bottomed out yet. More will suffer, more will lose, more pain is coming….Have a nice day!!
Corporate‑friendly legalization was never my first choice. I actually didn’t vote for it because after years of bullshit I didn’t trust it. I then spent countless hours calling farms, dispensaries, and anyone who would listen trying to get the one‑acre cap reinstated. Most farmers at the time told me to kick rocks not because they were bad people, but because greed had already taken root.
Ironically, Mendocino farmers and dispensaries were the ones most committed to staying small and acting like a community. I saw the same thing years ago in Denny, where neighbors informally capped each other at 40 plants; if you grew more, the community handled it. They regulated themselves because they cared about each other.
That’s why I believe so strongly in direct marketing. But 10,000‑sq‑ft limit for microbusiness direct sales is too low. A one‑acre inclusion makes more sense you produce less, earn the same, and reduce environmental pressure. It’s a smarter, more sustainable model.
And I want to honor your anger and frustration, because we’ve shared the same grief watching greed tear apart people we love and the community we grew up in. I’m not trying to erase that I’m trying to find solutions that actually work. Thank you for weighing in. I respect what you’re saying, and there’s a lot of truth in it. You have a good day too. Stay cool its going to be a hot one 🙂
Deep water port
heavy industry
offshore oil
will bring a flourishing economy and will clean up the blight and environmental degradation we are currently experiencing
Come on Zach!!! Farmer said a productive conversation! So here are some correct examples: Promote and replace the local fishing industry with whale watching tours. Marijuana farm tourism – like the “Wine Country”. More Marijuana Dispensaries!
Seems strange for a fisherman to be advocating offshore oil. Maybe there are better safeguards these days, but with the number of earthquakes in the area, I’m a little dubious. Cascadia Subduction Zone – Pacific Plate, North American Plate and the Gorda Plate – Pacific Rim of Fire. Personally I’d rather see offshore wind development and ultimately Small Modular Reactors (SMR’s).
Nuclear energy is absolutely feasible in the United States from an engineering standpoint and is already a proven source of reliable electricity. The biggest questions are whether policymakers, utilities, and taxpayers are willing to bear the high upfront costs and long development timelines in exchange for decades of carbon-free, around-the-clock power generation. For a country seeking reliable electricity and reduced emissions, nuclear remains one of the few scalable options capable of providing large amounts of power regardless of weather conditions.
For sure a deep water port but you would need a rail system to efficiently move the goods. Been talked about for decades. If Humboldt Bay were transformed into a true deep-water container port handling large volumes of international cargo, a freight rail connection to the interior could become economically justifiable and potentially transformative for the region. In that scenario, the question would shift from “Can we justify a railroad?” to “What is the most efficient rail route to connect Humboldt Bay to the national rail network?” Without substantial port traffic, however, a Eureka–Redding rail line would remain difficult to justify financially.
I agree with most your points. Wind power however is concerning to me due to the amount of ocean needed to place the equipment. Also environmental consequences much more degrading than oil extraction. Bird life marine, mammal’s ,loss of upwelling due to the wind being expended on the turbines. National security concerns that President Trump spoke about in yesterday’s EO he signed to open up more opportunities for American commercial fishermen. Check it out on Utube.
Where did this 12 million all of a sudden come from? They didn’t have that 12 million when the Civil Grand Jury inspected their finances. Wonder why that 12 mil can’t go toward their unfunded pension liability. People who currently work for the county are definitely not getting their pensions unless they retire within the next year or two.
Not just Humboldt County. Eureka Sales tax is down and Eureka is facing a budget crisis with $1.3 million increase in employee salary and health insurance costs along with an $800,000 increase in retirement and liability insurance costs for upcoming fiscal year. Fortuna has a $1.8 million funding gap. Rio Dell considers its budget storm for 2026 – 2027 fiscal year with its staggering drop in revenue. Arcata officials talk of how resource limited they are.
IMHO:
Those other governments are also Newsomite infected.
They are elected by a Newsomite infected population.
For rational residents… there is no hope.
Those living long enough will watch that whole system… ‘head for the bottom’.
(Just like the Titanic*).
Yee hah !
(*) For the post-boomer generation: In 1912 Titanic was new ocean liner, was deemed ‘unsinkable’. It struck an iceberg and headed for the bottom. Lifeboats weren’t provided for most of the people on board.
Oh poo.
I seem to remember Madrone recently objecting to the Amazon facility as not the kind of jobs he thinks we need. I understand he has spent his entire life working for so called “non profits” and government agencies so he doesn’t really understand the concept of earning money…but. A County has to have a taxbase to have money, it can’t all come from grants.
The tax base can’t just come from Marijuana grows – it looks like! I’m on board with frequent commenter Jebs (he rides offshore windmills). Jebs frequently advocates for California to secede from the USA. I think Humboldt County should secede from California to become its own “Banana Republic”. The national anthem could be “yes we have no bananas”.
State of ‘Jefferson’ was a good deal… then WWII broke out.
Back then, some people knew what was coming for rural California.
Idea has been semi-resurrected. Now it’s ‘Greater Idaho’. Humboldt Bay and Coos Bay would be important seaports to that state !
If you think about the almost $6 million spent on Kmartt and the upgrades after words we are more likely $8 million after that just for that 1 property that does nothing for the community .Thank you RexBohn for voting against it being more fiscally responsible and try to protect the tax payers .Steve Madrone amd Natile Arroyo worked for REDWOOD COMMUNITY ACTION AGAENCY that was a huge draw of grant money from the Tax payer also .Damn!! People start voting with a little education of the person you vote for and not your for not just because you met them once and think they are nice .Being nice will
CHANGE YOUR WAY OF VOTING AND HELP YOUR COMMUNITY ! VOTE FOR FISCALLY RESPONSIBOE PEOPLE THAT DONT OVER SPEND,LESS TAXES AND NO INCREASES COMING OUT OF OUR POCKETS !!!