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Clearing Up the Fund Balance Confusion

There’s been some conversations and some confusion about how much money the ÅÝܽÊÓƵapp actually has on hand to address budget shortfalls.

This year (FY25), ASD planned to use about $37 million from its fund balance to help close the budget gap and ASD expects to use the full amount.

Looking ahead to next year (FY26), $49 million more is already committed to help balance that budget.

Once those two amounts are set aside, there will only be about $6 to $8 million left in truly spendable funds. That’s about 1% of the total budget, and it’s what ASD can use for emergencies or unexpected costs.

To make FY26 work, ASD is counting on:

• Using most of the remaining spendable savings, about $49 million, and
• About $65 million in budget reductions.

You might’ve seen a story stating or heard someone say ASD has an $121 million unreserved fund balance. But here’s why that number doesn’t tell the whole story:

• The $121 million is the ending unreserved balance from last year (FY24)
• $37 million of that will be spent this year
• $27 million is locked away in a Bond Debt Rating Reserve — it can’t be touched.
• $49 million is already planned for next year’s budget.

Take those out, and you’re left with about $6–8 million to address emergencies such as earthquakes, volcanoes, and fires.

FY26 General Fund Budget Outlook 

• Structural Deficit (General Fund + Transportation) - $111m
• FY25 Operating Budget = $638M   Projected FY26 Operating Fund Budget = $651M
• Projected Revenues = $543.6M
  • $94M less than FY25 without one-time supplemental funding
• Estimated $27M in fund balance available at 8% minimum per board policy
  • $47M available at 5%
• FY26 Budget Deficit (Projected Revenues vs. Expenditures) without use of Fund Balance = $107M
• FY26 Budget Deficit (Projected Revenues vs. Expenditures) WITH use of Fund Balance = $60M