Nevada County Risks Its Financial Reputation — Time for a Truly Balanced Budget

As the Nevada County Board of Supervisors considers a proposed $415.5 million budget for FY 2025–26, it is our civic duty to confront a troubling truth: this budget is not balanced, and pretending otherwise puts our county’s financial credibility—and our AA credit rating—at serious risk.

According to the County’s own published figures, actual projected revenues for FY 2025–26 total just $391.6 million. Yet expenditures are slated to exceed that amount by nearly $24 million. That is a structural deficit, not a temporary misalignment. Relying on one-time funds or reserves to paper over this shortfall is irresponsible. It undermines public trust, increases long-term liabilities, and compromises the county’s ability to respond to future economic downturns.

The situation becomes even more concerning when you consider the county’s pension liabilities. Nevada County’s CalPERS pension fund is only 62.8% funded, well below the statewide average of approximately 80%. This is a major red flag. Underfunded pensions are not a distant threat — they are a compounding liability that places growing pressure on every future budget. The deeper the funding shortfall, the more taxpayer dollars will be diverted away from roads, housing, broadband, and essential services in the years ahead.

When you combine a 62.8% pension funding ratio with a $23.9 million budget gap, you’re not managing risk — you’re accelerating it. Nevada County is inching closer to the fiscal danger zone, and unless these trends are reversed, we could lose our AA credit rating—a rating that signals fiscal strength and stability to investors, agencies, and the public.

Credit ratings matter. A downgrade would raise the cost of borrowing for public infrastructure, strain future budgets, and diminish the county’s reputation as a responsible steward of taxpayer resources. Other counties are already contending with these realities. Colusa County, for example, is only 60% funded and carries a lower A+ rating. Kern County, with 64% funding, has been downgraded in recent years. Santa Cruz (68%) and Shasta (73%) are in stronger positions—but even they are taking steps to avoid the fiscal pitfalls Nevada County is now courting.

Why should we accept this risk? We don’t have to.

That’s why I’ve submitted a Comprehensive Budget Proposal that restores fiscal discipline without raising taxes or cutting essential services. It reflects the principles of balance, transparency, and long-term sustainability. It does the responsible thing:

• Aligns expenditures with the real revenue estimate of $392 million
  - Preserves the General Fund reserve rather than using it for operations
  - Avoids new taxes, instead fostering organic growth through housing and tourism
  - Redirects discretionary and surplus funds toward pension liabilities
  - Re-prioritizes capital and staffing plans based on financial realities

Yes, this will require hard choices — but failing to act now only ensures more painful choices later.

The Board of Supervisors must take five key actions:
1. Amend the budget to reflect actual projected revenue
2. Freeze all nonessential new staff positions
3. Reject new or increased taxes
4. Reallocate discretionary funds toward long-term economic growth
5. Direct all surplus funds toward pension liabilities and reserves

This isn’t austerity. It’s fiscal maturity. A budget that aligns spending with actual income is not just good governance — it’s a moral obligation to current and future residents of Nevada County. It’s about ensuring that our promises — including pensions — can be kept without mortgaging our future.

The County’s public image, borrowing costs, and economic flexibility all hinge on a simple standard: live within our means. If we can’t do that in a year of relative economic stability, what will happen when conditions tighten?

A truly balanced budget is not a procedural box to check — it’s a declaration of priorities, values, and foresight. It tells rating agencies, taxpayers, and public employees that we are serious about stability and committed to responsible growth. It tells residents that their leaders are honest about the numbers — and willing to make principled choices.

Let’s take this opportunity to lead by example. Let’s be the county that corrects course before crisis hits. Let’s put our financial house in order — not just for 2025, but for the decades to come.

Nevada County can do better. Let’s prove it.