San Luis finance director warns of multi‑year shortfalls; staff proposes property tax, fee and rate changes

SAN LUIS — The city of San Luis faces multi‑year budget shortfalls that could drive its general fund reserves below policy levels within three years unless the council adopts new revenue measures and spending controls, Finance Director Rola Encinas told the City Council during an informational presentation.

Encinas outlined a five‑year forecast that assumes modest annual revenue growth, rising costs for salaries and maintenance, and no new long‑term grants. "This discussion is crucial because our budget is facing several upcoming challenges, and we need to prepare for how these changes may impact our city services and operations," Encinas said as she began the report.

The finance presentation highlighted several risks: a state proposal to remove the food sales tax that could cut San Luis sales tax receipts by about $4,000,000; a $2,500,000 reduction in state shared revenue already realized in the current fiscal year under a flat 2.5% state income tax arrangement; and potential federal grant freezes. Encinas said those and other pressures leave the city with a structural deficit under current policies and revenue streams.

Why it matters: The general fund supports police, fire, parks and other core city services and also subsidizes some enterprise activities. Encinas told the council that the city is…