Humboldt County schools adopt FY2026 budget as officials warn state funding remains uncertain

The Humboldt County School District board on Tuesday approved the district's fiscal-year 2026 final budget after staff described last-minute changes linked to statewide funding decisions.

District staff told the board the budget as adopted includes a $1,300,000 salary-adjustment placeholder tied to the people-centered funding plan and what staff called "Senate Bill 231," even though the state process had not been finalized. "At this point, the governor has not signed it yet," a district finance staff member said during the presentation.

The budget passed so the district can meet state deadlines; staff said the placeholder will be reworked in a December budget augment if the state moves the adjustment from the permanent funding formula into a competitive grant. "What you'll likely see is when we do the budget augment, which will be presented to you in December, the 1,300,000.0 will be pulled out," staff told trustees.

Why it matters: district officials said the funding shift could meaningfully reduce the district's reserves. The adopted budget shows an ending fund balance of about $1,856,000; staff estimated that, if the $1.3 million were shifted out, the balance could fall to about $510,000, a level the district said is below the state's 4% minimum and would trigger corrective oversight.

Key facts: staff presented finalized state base funding of $36,902,763 for the general fund, about $80,000 more than the district's tentative estimate and $187,000 above the prior year. In addition to the $1.3 million placeholder, staff said identified savings of about $360,000 from several classified positions that will not be filled; that amount has been redirected to the information-technology budget for device replacements and server needs.

Discussion and board concerns centered on sustainability and timing. Staff described two possibilities: keep the $1.3 million in the people-centered funding plan (which would make the funds appear recurring) or accept the state's apparent plan to award the dollars through a grant cycle, meaning districts must apply competitively and the money may not be permanent. "We wanted to be part of the PCFP so it becomes more permanent," a district official said. "When they take it out and put it into a grant, they're questioning whether they're going to be able to sustain that."

Trustees and staff also discussed practical ways to shore up reserves, including leaving some vacancies unfilled and continuing to review expenditures districtwide. Staff said they will present a budget augment in December to reconcile final state action, finalize salary and staffing adjustments, and reflect any grant awards.

The board voted to approve the fiscal-year 2026 tentative budget as the final budget. Trustees were not recorded individually in the public transcript; the motion carried at the meeting.

What happens next: staff said they will monitor final legislative action and the governor's signature status, update the board at the June 11 meeting with any legislative outcomes, and prepare a budget augment for December if needed. District leaders also said they will work with unions on any grant application process should the funding be shifted to a competitive award.

Additional context: during the discussion staff warned that if the district drops below the 4% ending fund balance threshold the state would place the district on corrective action and could exercise greater oversight. Board and staff comments emphasized the cyclical nature of the district's finances and the longer-term goal of stabilizing recurring revenue.