Modoc County warns of third year structural general‑fund deficit; officials flag need for revenue or service cuts

An agency official presenting the proposed 2026–27 Modoc County budget warned supervisors that the county is entering its third consecutive year with a structural general‑fund deficit and limited options to close the gap.

“The short of that is most of your general fund revenues are fixed,” the presenter said, noting that the county has prepaid much of its CalPERS unfunded accrued liability, which has stabilized pension payments but not revenue trajectories. He added that many assessments were set decades ago “and they don't have a growth factor to them.”

The presenter said the county has contained costs and limited inflationary growth in insurance and other line items, but that baseline revenues — including property tax constraints established under Proposition 13 and federal public‑lands payments — are insufficient to match rising costs. “There will either be severe cuts to services … or there's gonna have to be some form of discretionary revenue measure in this community moving forward in a few years,” he said.

Board members asked for department‑level detail and noted staff plans to use fund balance and targeted investments this year to smooth the shortfall. The presenter said some one‑time uses (pension prepayments, facility acquisitions that reduce lease costs) will help in the short term but will not erase the structural imbalance without either new revenues or sustained program cuts. The board did not adopt any new measures at the hearing; further budget adjustments and midyear reviews were discussed as next steps.