Napa County isn’t facing immediate budgetary challenges this year, but county staff expect to face financial pressures in upcoming years that may squeeze spending, including from slowdowns in tax revenue and increased insurance costs.
County staff estimate the general fund budget in the current 2025-26 fiscal year will end with a positive balance of about $11.2 million, according to a March 24 staff report. That means the county doesn’t anticipate needing to make adjustments to make it through the rest of the fiscal year.
But as county staff work to prepare the 2026-27 budget, financial stresses, among others, include:
- Rising health, liability and property insurance costs.
- A slowdown of property tax revenue growth and lower-than-expected revenue from other sources such as sales tax and the transient occupancy tax assessed on hotel rooms.
- The cost of the county’s ongoing general plan update, expected to total about $6.5 million.
- Road repairs after 2025 storm damage, expected to cost around $10 million total.
- Aging county buildings, which are in need of renovation. This has also caused the county to lease spaces, increasing costs.
- The labor agreement with the union group that represents most county employees, the Napa Association of Public Employees, is set to expire June 30, 2027.
- The potential loss of a complicated revenue source that generates about $30 million annually for the county: in lieu of Vehicle License Fee property tax payments.
Napa County Supervisor Liz Alessio said at a March 24 meeting that the county needs to acknowledge revenue sources are either flattening or dropping, and that the county should seek to look into ways to increase revenue later on — such as supporting businesses in the unincorporated area.
Supervisor Joelle Gallagher called on the county to hold budget workshops before heading into budget hearings in May and June. That would help the supervisors have a discussion around their priorities as they’re expressed through the budget, she said.
Gallagher also suggested the county look at the “fiscal ripple effect” of programs and how they help save money elsewhere. For example, she said, investments in county Health and and Human Services programs and homelessness programs directly impact how much the county spends on law enforcement and public safety.
“We have to be able to figure out a way to look at those benefits that accrue to the county, very real dollar benefits, which may happen over a longer period of time than 12 months,” Gallagher said.
You can reach Staff Writer Edward Booth at 707-521-5281 or edward.booth@pressdemocrat.com.