To close the gap, the plan relies on a mix of ongoing and one-time strategies, which includes spending reductions, revenue adjustments and funding shifts.
SACRAMENTO, Calif. — Sacramento city officials have released a proposed $1.7 billion budget for the 2026–27 fiscal year that aims to close a $66.2 million General Fund deficit while maintaining core services and moving forward with City Council priorities.
The proposal includes an $898.3 million General Fund and supports about 4,822 full-time equivalent positions, according to the City of Sacramento.
City officials say the shortfall reflects a structural imbalance, where ongoing expenses continue to outpace revenues. The gap is due to rising service demands, inflation and reduced state funding for homelessness programs, officials said.
To close the gap, the plan relies on a mix of ongoing and one-time strategies, which includes spending reductions, revenue adjustments and funding shifts. About 75% of those measures are ongoing.
“This proposed budget reflects months of work to address a structural deficit that cannot be solved with one-time fixes,” said City Manager Maraskeshia Smith. “It makes difficult but necessary decisions to align our ongoing costs with available revenues, while continuing to deliver core services and strengthen the City’s long-term financial stability.”
The budget also restores several reductions identified earlier this year after feedback from the City Council and community, including park maintenance services, youth programs, the Police Department Magnet Academy and some fire suppression vacancies.
Even with those restorations, the proposal eliminates 46.1 filled positions, in addition to vacant roles, as part of the effort to balance the budget. Some impacted employees may be reassigned to other positions, and no sworn police or fire personnel will be separated from the city as a result of the changes.
The proposal also reflects a shift away from previously considered revenue options. The city is no longer pursuing parking meter rate increases or residential parking permit charges.
City leaders said the budget maintains a focus on priorities, including economic development, homelessness and public safety. Planned investments include creating a new Economic Development Department, expanding homelessness outreach and shelter capacity, and maintaining sworn police and fire staffing levels. The city will also continue funding programs such as FUEL Network and RydeFree RT.
City officials said economic uncertainty remains, including inflation, potential recession risks, unfunded pension liabilities and deferred infrastructure needs.
The budget now enters a public review process, with City Council hearings scheduled in May and final adoption expected June 9. Community members can attend meetings, submit comments or contact city leaders to participate in the process.
Sac City Unified races to avoid state takeover amid budget crisis
ABC10: Watch, Download, Read
1
/
12