The City of Sacramento released its proposed budget for Fiscal Year 2026/27 on Apr. 29, outlining a plan to close a $66.2 million General Fund gap while maintaining essential services and advancing City Council priorities.
The proposed budget totals $1.7 billion across all funds, with an $898.3 million General Fund supporting approximately 4,822 full-time equivalent positions. City officials said the structural deficit is due to ongoing expenses growing faster than revenues, driven by increased service demands, inflation, and reduced state funding for homelessness programs rather than an economic downturn.
To address the shortfall, the proposal combines ongoing and one-time strategies such as expenditure reductions, revenue adjustments, and funding shifts. About three-quarters of these solutions are ongoing measures intended to improve long-term financial stability. “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 proposal builds on early work from March’s Early Budget Work Sessions where departments outlined reduction strategies and potential service impacts as part of a baseline balancing plan. Based on feedback from the City Council and community members, several reductions identified in March were restored in this proposal—including the Police Department Magnet Academy program, partial restoration of Fire suppression vacancies, park maintenance services, and programs within Youth, Parks & Community Enrichment.
Changes were also made regarding previously considered revenue options: increases in parking meter rates and residential parking permit charges will not move forward despite appearing in print versions of the document due to late changes before publication.
Despite these restorations, reductions remain necessary; the proposal includes eliminating 46.1 filled full-time equivalent positions plus additional vacant roles as part of balancing efforts. However, not all eliminations will result in employee separations—some may transfer into other available positions—and no sworn police or fire personnel will be separated due to these measures.
Key investments highlighted include creating a new Economic Development Department; continued outreach for homelessness response; shelter expansion; maintaining sworn police and fire staffing levels; along with continued support for FUEL Network initiatives and RydeFree RT transit access programs.
Looking ahead at broader challenges facing Sacramento’s finances—such as inflation risks or unfunded pension liabilities—the city will begin its public review process with council hearings scheduled throughout May before final adoption expected June 9.
