The Santa Barbara City Finance Committee on Oct. 21 voted to send staff’s general fund multiyear forecast and a tiered list of more than 200 recommended revenue and expenditure options to the full City Council, and asked staff to begin polling on possible voter measures for 2026.

City finance director Keith DeMartini told the committee the briefing was intended to recap last week’s presentation and to ask for committee direction on how to prioritize options to help balance the budget, noting “pressures on our revenues and how our expenses continue to rise” and that recently adopted memoranda of understanding for public safety bargaining units exceed the assumptions in the adopted budget.

Why it matters: staff presented a forecast showing general fund pressure from flat sales-tax receipts and lower-than-expected transient-occupancy-tax (TOT) revenues, alongside higher personnel costs. The committee’s direction will shape what the City Council considers in fall and next year as staff refines revenue estimates and implementation details.

What the committee decided and directed

- The committee voted unanimously to forward staff’s packet — including the general fund multiyear forecast and the attachment listing staff’s recommended options (tiered as near-term, medium- and longer-term) — to City Council with the committee’s feedback and priorities. The motion passed without opposition.

- Committee members also asked the city administrator to pursue public polling on a set of potential ballot measures and revenue options so the council has voter-testing information well ahead of the November 2026 regular municipal election. Committee members discussed, but did not vote formally on, other near-term administrative steps such as an ordinance to raise the local cannabis tax rate toward the voter-authorized maximum.

Major items discussed

Revenue measures and ballot timing: Staff described several options that would require voter approval. DeMartini said the city could not place a measure on a 2025 ballot and would target the November 2026 election; the deadline to submit ballot materials to the county would be in early August 2026. Committee members repeatedly said they want polling on a library parcel tax, a tiered progressive real property transfer tax (sometimes called a “mansion tax” elsewhere), and possible changes to the TOT. DeMartini and other staff explained revenue estimates vary widely depending on the precise structure of a tax.

Cannabis tax: Several committee members said a quick, administrative increase of the cannabis tax is a priority because voters previously authorized a higher maximum. Member Harmon said, “I feel strongly that we need to increase, to the maximum rate allowable our cannabis tax rate.” Staff said the original voter-approved ordinance authorized a tax up to 20 percent and that council action (likely an ordinance) would be required to raise the current rate; staff noted outreach to affected businesses and a transition period would be prudent.

Library services and public comment: Two members of the public and multiple committee members urged protection of library services. Barbara Cronin Hirschberg, president of the Friends of the Santa Barbara Library, told the committee: “The important thing about libraries is that they are often one of the only free welcoming public spaces where everyone is treated with dignity.” Staff clarified an earlier typographical error in the draft options (a suggested closure date was misprinted as 10/22/2025 and should read 12/22) and said the recommendation would be to retain the library’s normal holiday and early-closure pattern rather than institute an extended closure. Committee members uniformly opposed extended library closures as a cost-saving item.

Harbor and waterfront options: Waterfront staff briefed the committee on possible revenue options for harbor property, including automating the Harbor Main lot, expanding nighttime or after-hours parking use of the city lot, and creating temporary RV campsite spaces in portions of waterfront parking lots. Waterfront director Mike Welshire said conversion of some lot areas to RV campsites has generated revenue in other coastal communities, but emphasized the need for outreach to harbor stakeholders and Harbor Commission review.

Vacancy tax, short-term rentals and TOT questions: Staff described a vacancy tax as primarily behavioral, not a reliable revenue source, and noted high administrative costs and limited legal precedent. DeMartini said, “A vacancy tax is not designed to be a revenue generator. It’s designed to change behavior.” Committee members also discussed short-term vacation rental policy and the trade-offs between allowing additional rentals (which could increase TOT) and council direction earlier this year to restrict short-term rental locations. Several members said expansion of short-term rental permitting would contradict prior council direction and should not be prioritized.

Other operational items: Committee members discussed voluntary four-day work-week proposals (largely voluntary reductions to 32-hour schedules with benefits maintained), business-tax modernization to simplify rates and classifications, contracting-out concerns, and cruise-ship manifest fees (staff said the manifest fee is now $15 per passenger and the city has a 20-visit annual cap agreed with the community).

Votes at a glance

- Motion: Forward staff’s general fund multiyear forecast and the attachment of recommended revenue and expenditure options to City Council with the committee’s feedback and priorities.
- Mover: Chair Friedman
- Second: Member Santa Maria
- Vote: Chair Friedman — yes; Member Harmon — yes; Member Santa Maria — yes
- Outcome: approved
- Notes: The committee also verbally encouraged the city administrator to begin public polling on potential ballot measures; the polling direction was not recorded as a formal committee motion but was accepted as committee guidance.

What staff highlighted about implementation and constraints

- Timing: A ballot measure for November 2026 is the feasible near-term target; the county’s ballot submittal deadlines (typically early August) mean staff recommended beginning polling and drafting language as soon as practicable.

- Administrative burden: Some options — notably a vacancy tax — carry ongoing administrative costs and require new software and staffing to validate claims and assess properties.

- Labor and contract impacts: Several recommendations could affect employees or bargaining-unit terms (for example, automation of some parking functions or contracting-out service delivery). Committee members and commenters repeatedly asked for bargaining-unit consultation and cautioned about unintended workforce impacts.

Next steps

Staff will refine revenue estimates, costings, and implementation timelines for the items the committee prioritized and will bring those details to the full City Council. The committee asked the city administrator to begin public polling on selected ballot ideas and to return with more detailed recommendations.

Attribution: Quotes and direct paraphrases in this report come from committee members and city staff recorded during the Finance Committee meeting on Oct. 21, 2025. Public comment by Barbara Cronin Hirschberg is attributed to the Friends of the Santa Barbara Library.