Santa Ana to finalize 2026-27 budget, planning to allocate approximately 7 million for daily operations.
Santa Ana city officials have advanced a balanced budget for the 2026-2027 fiscal year, while simultaneously cautioning that sustaining this budget in subsequent years may prove challenging without alterations to either revenue generation or expenditures. The proposed budget outlines recurring revenues and operational expenses each estimated at approximately 7.3 million, following the implementation of various balancing measures.
Despite achieving this balance, city officials have expressed concerns over the likelihood that future expenses will escalate at a rate surpassing revenue growth. This anticipated increase in costs is attributed to factors such as inflation, labor agreements, rising contract costs, and pension obligations. A significant consideration in this financial equation is Santa Ana’s local sales tax, which has contributed million to the city’s finances but is scheduled to begin phasing out in April 2029.
The budget for 2026-27 preserves essential city services without necessitating layoffs or furloughs among full-time employees; however, several vacant positions have been cut. An earlier projected deficit of approximately million within the general fund has been ameliorated through a combination of spending reductions, revenue adjustments, and other fiscal balancing strategies.
Property taxes represent a critical component of the city’s revenue, with estimates suggesting nearly 7 million will be collected in the upcoming fiscal year, marking a 3.7% increase from the current year. Sales taxes also play a pivotal role, with projections indicating they will surpass property tax revenues, contributing around 6.4 million. This figure encompasses funds from statewide sales tax collections, as well as local measures including Measure X, which contributes an additional 1.5% sales tax.
Additionally, taxes from permitted cannabis businesses within Santa Ana are forecasted to yield .1 million in revenue. In broad terms, the city anticipates generating sufficient revenue to meet regular operational costs and fulfill annual reserve contributions; however, the surplus will be minimal.
Taking into account planned one-time expenditures, the total general fund expenditure for 2026-27 is projected to reach about 5 million, with funding for these additional costs being covered by available fund balances instead of ongoing revenue.
Public safety remains the largest expenditure within the general fund, absorbing a significant portion of the budget—approximately 8.4 million, or 53%—dedicated to the police and fire departments, along with emergency medical services.
For residents, the budget addresses community investments, including enhancements to Cabrillo Park, improved lighting and security on the Alton Bike Trail, and maintenance of streetlights and sidewalks. There are also funds allocated for potential land acquisition for a new park in the Washington Square area.
However, the budget balancing efforts necessitate cuts or restructuring of several public services. These changes could impact park maintenance, community programs for youth and seniors, and other public-facing services, thus drawing scrutiny from city leaders. Notably, reductions to the Police Athletic and Activity League program have sparked discussions among council members, highlighting differing views on the long-term implications of such cuts.
The finalized budget will undergo a second reading at the City Council meeting scheduled for June 16, ahead of the new fiscal year commencing on July 1. City officials are committed to maintaining transparency throughout this process as they navigate the complexities of municipal budgeting amidst financial constraints.
