Days before the San Diego County Board of Supervisors is scheduled to adopt its multibillion-dollar budget for the year that begins July 1, a government watchdog group is ringing alarm bells over the fiscal health of the nation’s fifth-largest county.

Most concerning, according to an analysis by the San Diego County Taxpayers Association, is a 2026-27 spending plan that is balanced on paper but drifting steadily toward a structural deficit like the one that haunts the city of San Diego.

The driving force behind the worsening budget scenario is a 28% increase in the number of employees over the past decade and a half.

The 23-page analysis also pointed to escalating public health and social services costs, declining investments in capital improvements and an outsized reliance on state and federal tax dollars as drivers of the county’s diminishing financial health.

“The county spends more every year to grow its workforce while the infrastructure that supports operations is allowed to crumble,” said Mark Kersey, president and chief executive officer of the San Diego County Taxpayers Association.

“More than half of the general fund comes from Sacramento and Washington – dollars the county cannot control – yet it has not prepared for cuts already scheduled,” he said.

A spokesperson for San Diego County said the proposed budget reflects thorough, year-round planning and careful consideration of community priorities and input.

“This ensures long-term fiscal stability while managing a consistently changing environment and meeting the needs of the community,” spokesperson Tammy Glenn said by email. “The analysis of San Diego County’s Taxpayers Association is lacking additional context and details that would provide an accurate representation of the county’s fiscal health and stability.”

Glenn also noted that San Diego County enjoys Triple A credit ratings from all three major rating agencies.

The county Board of Supervisors on Thursday is scheduled to consider adoption of the proposed $9.2 billion budget for the 2026-27 fiscal year that starts July 1. Two Republican supervisors worry that the spending plan relies on reserves; the Democratic majority said the budget is fundamentally sound.

Now more than 80 years old, the San Diego County Taxpayers Association is a nonprofit, non-partisan government watchdog organization. It regularly produces research and policy analysis in order to promote efficiency and effectiveness among elected officials.

The taxpayers’ review of county financial practices follows a similar – and more scathing – analysis of San Diego city spending the organization released in April.

Like the evaluation of city finances, the latest study noted that the public payroll increased at a rate that was notably higher than the population within its jurisdiction. For San Diego County, the growth in its workforce was nearly four times the rate of residential growth.

San Diego County now employs 6.15 people per 1,000 residents, up from 5.07 full-time workers per 1,000 residents in 2011, the study said. In inflation-adjusted dollars, personnel costs have climbed by 53%, to $3.5 billion, it added.

Labor now accounts for almost 41% of county spending – up from the 32.5% it accounted for in 2011, the report said.

The growth in payroll was due in part to rising costs for food stamps, health care and other state and federal programs – all efforts that are vulnerable to legislation such as the “One Big Beautiful Bill Act” passed by Republicans in 2025 that slashed Medicaid and Medi-Cal payments, the study said.

“The county is obligated to deliver service levels that follow caseload and eligibility rules set in Sacramento and Washington,” it said. “But the county retains meaningful discretion over how it administers those programs, and also controls fiscal levers that are entirely local.”

The consequences of the county’s fiscal practices are most visible in the region’s declining investments in infrastructure, the taxpayers’ association report said.

“The county’s capital-improvement program has collapsed to $45.8 million in Fiscal Year 2026 – the lowest in the 16-year data set and only 0.5% of the budget,” the report said.

“The county has published no facilities condition assessment for its 7.6 million square feet of buildings, even as the deferred Vista Detention Facility replacement alone nears a projected $1 billion.”

In 2011, San Diego County dedicated some $289 million to capital projects, the taxpayers’ study noted, 4.1% of overall spending. The sharp decline in spending on long-term projects shows that elected officials are willing to put off difficult spending decisions, the authors said.

“The volatility itself is a finding,” researchers said. “It indicates that the county treats capital investment as discretionary rather than a planned, lifecycle-based obligation.”

While county officials have yet to create a structural budget deficit – where annual obligations regularly exceed revenues and services fluctuate widely from year to year – expected changes in demographics may worsen current conditions, the study said.

The taxpayers’ group said the number of people aged 65 and older is expected to grow by 244,000 over the next two decades-plus, driving up demand for the most expensive services while the working-age tax base shrinks.

“Every one of these pressures – the federal cost-shifts, the aging population, the maintenance backlog – is knowable and already on the calendar,” said Mike McLaughlin, the San Diego County Taxpayers Association chairman.

“The county’s job is to build a budget that can absorb them,” McLaughlin said. “Instead, the data shows it drawing down reserves and leaning on one-time money in the very year it was warned about the cliff.”

The study also criticized San Diego County for providing limited insight into the specific outcomes of many local programs.

For example, researchers said, a 2024 assessment by the accounting giant Deloitte singled out the county’s escalating spending on efforts to prevent homelessness.

In all, that review found that the county operates 46 homelessness programs funded by 28 different sources. It also identified critical gaps in case-management tools and inconsistencies in its data collection across various programs.

Even though “rent-voucher programs showed better-than-national-average success rates at keeping people housed, the fragmentation of funding and programming makes it difficult for the county – or taxpayers – to evaluate cost-effectiveness or track year over year progress against measurable goals,” the study said.

Founded in 2013, Robinhood (HOOD +2.80%) changed the brokerage industry with its free trading model. Today, the broker’s product lineup has expanded well beyond stocks to include products like cryptocurrencies and prediction markets. With a focus on smaller investors, Robinhood is living up to its goal to “democratize finance for all.” But is becoming a full-service financial platform enough to make the stock a buy?

Robinhood is growing quickly

Although it was founded in 2013, Robinhood didn’t go public until 2021. In its first earnings release in the second quarter of that year, it had $102 billion in custody. In the first quarter of 2026, roughly five years later, that figure had grown to $307 billion, and it is now called total platform assets, given the broadening of the company’s business. The company has rapidly become a major player in the finance industry, building off its early success in attracting younger traders interested in stocks.

There’s no question that management deserves a great deal of credit for what Robinhood has achieved. But that alone doesn’t make the stock worth buying. Notably, Robinhood is being afforded a premium valuation, with a price-to-earnings ratio of 45x, compared to P/Es of 39x for Interactive Brokers (IBKR +0.96%) and 18x for Charles Schwab (SCHW 2.97%). A growth investor may be able to justify Robinhood’s valuation, but a value investor likely wouldn’t be interested.

What’s going on with Robinhood’s customer base?

There’s another issue to consider here as well. With a focus on new investors, Robinhood may be taking on more risk than its long-established peers, such as Charles Schwab. This potential risk was highlighted in Robinhood’s solid first quarter 2026 results. Risk-taking is the big issue.

While Robinhood’s transaction-based revenue jumped 7% year-over-year in the quarter, that growth was largely driven by prediction markets, which boosted “other” revenue by 320%. Cryptocurrency-related revenue, however, fell by 47%. This is notable because it suggests that aggressive investors shifted to what is the current hot trading idea.

Today’s Change

(2.80%) $2.95

Current Price

$108.15

Key Data Points

Market Cap

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$97B

Day’s Range

$103.46 – $109.08

52wk Range

$63.52 – $153.86

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Volume

39.5M

Avg Vol

31.1M

Gross Margin

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94.92%

The problem is that Robinhood has never lived through a deep market downturn, such as the dot-com crash or the bear market associated with the Great Recession. Until it has, it is hard to know what its customers will do when every market seems to be heading lower, and losses are piling up. In other words, what will its customers do when there’s no new hot investment idea to jump on? There is a very real possibility that fear drives less experienced investors to get out of the market and stay out. Risk-averse investors will likely want to wait for Robinhood to be stress-tested before buying it.

Robinhood is not a bad company, but it is still quite young

None of this is meant to suggest that Robinhood is a bad company. It has done incredible things in a very short period of time. But that short period of time is a problem because the vast majority of it has been good for the stock market and investing. Robinhood’s stock is expensive, and the company has yet to face a deep, prolonged market downturn. Only the most aggressive growth investors will likely be interested in it for now.

Elon Musk made history again this month with the largest public offering of a company in the history of the known universe. Space Exploration Technologies, better known as SpaceX, began trading June 12 on the Nasdaq exchange under the ticker symbol SPCX. In the first three days, the stock soared by 50%, blasting the rocketeer past Amazon into fifth place among America’s largest companies.

While the public liftoff was impressive for its size and the hype surrounding it, what truly set this transaction apart was how Musk used his leverage to succeed in changing the rules during the final countdown and advance his own interest at the expense of shareholders.

Space Exploration Technologies is a truly intriguing collection of assets with a history of big accomplishments and even bigger ambitions. At its core is Starlink, a profitable satellite internet and data transmission operation. In the offering document, Musk imagines a network of massive orbiting data centers, which is not entirely crazy and is likely to face less political opposition from nearby residents.

SpaceX also includes the familiar rocket launch enterprise and an artificial intelligence startup called xAI with its Grok AI assistant. While private investors and Starlink have provided operating cash flows to fund the space operations, SpaceX needs substantial additional funding to support its galactic expansion plans. That requires selling shares of this privately held company to the public in an initial public offering.

The process involves a syndicate of investment banks that facilitates the sale of shares held by the company’s founders or private investors at a specific price, the proceeds of which allow early investors to cash out and provide a large injection of capital. Once the shares are sold to public buyers, they change hands on a market exchange at a price determined by supply and demand.

The prospect of the largest initial offering ever ignited a frenzy of interest. It also allowed Elon Musk to leverage the buzz of a monster IPO to convince Wall Street to bend the rules.

To win the listing, the Nasdaq stock exchange agreed to substantial waivers of its own listing rules. While new companies must typically wait at least three months before they become eligible for inclusion in the popular Nasdaq 100 index, Nasdaq jettisoned this “seasoning” period and allowed SpaceX to enter the index after only 15 days. This tech-heavy index serves as the benchmark for over $1.4 trillion in fund assets that will now be required to sell other holdings to make room for SpaceX in their portfolios. Estimates range from $8 to $15 billion in forced purchases that will create artificial demand for the stock. It also means that many passive investors in retirement funds will end up owning the stock, like it or not.

Nasdaq also waived its own liquidity rules. Ordinarily, at least 10% of the company’s shares must be offered to the public, called the “float,” or percentage, of the total stock value that trades publicly. SpaceX floated only 4.3% of its stock, with private shareholders retaining 95.7%. Using some arithmetic legerdemain, Nasdaq created a “multiplier,” triple-counting the float for companies in the top 40 by total market value. Presumably for firms whose founders’ initials are E.M.

To its credit, S&P Global Inc. considered but ultimately refused to loosen its own standards for joining the S&P 500 index, concerned about the potential reputational damage. The S&P 500 is the benchmark for $20 trillion in assets and opted to retain its 12-month seasoning period as well as a four-quarter profitability hurdle. SpaceX may one day dock with the S&P 500, but the countdown has not started.

Aside from eliciting waivers and exceptions for index inclusion, SpaceX massively advantages its visionary but mercurial founder. In its surprisingly entertaining prospectus, the company boosted Musk’s control far beyond his ownership stake. The shares issued to the public are called Class A shares, and each carries one vote on matters of corporate governance. However, Musk’s stake resides in so-called Class B shares, each with 10 votes, giving Musk 84% voting control.

There are a few other little gems. The prospectus requires that any disputes between shareholders and the company must be settled privately through arbitration. Lawsuits, including the type of class action suits that tend to hold management’s feet to the fire, are expressly prohibited. And speaking of fire, Musk may only be fired by himself.

Some of these more restrictive provisions have been used before. For instance, in its initial offering, Google essentially pioneered the idea of multiple share classes that vested voting control with the founders. SpaceX propels contempt for shareholder rights into a higher orbit.

Separate from the structural disadvantage to public shareholders is the question of valuation. SpaceX lost nearly $5 billion in 2025 and another $4 billion just last quarter. The initial offering of loss-making companies is hardly new, especially in technologically emerging fields. SpaceX has reached the stratosphere.

With no profits to measure, a useful metric is the ratio of the total value of all the company’s stock divided by last year’s revenues, called the price to sales ratio. When the unprofitable Amazon went public in 1996, its total market value was three times its 1995 sales. Google’s 2004 offering priced at 15 times sales, Facebook at a hefty 28 times, and even Musk’s own Tesla launched at a multiple of 15 times sales. SpaceX cleared the tower at an otherworldly 95 times sales, soaring to 130 by the end of day two as the frenzy intensified. During the first full trading day, it comprised 75% of all stock purchases by individual investors. In the prospectus, Musk expatiates on his plan to colonize Mars. He’s halfway there.

There is no precedent for a public offering of this size, with such a long and speculative arc toward profitability and so few shareholder protections. SpaceX is a pure play wager on a precocious space cadet with interstellar aspirations astride a solid rocket booster. Enjoy the ride.

Christopher A. Hopkins, CFA, is a co-founder of Apogee Wealth Partners in Chattanooga.