Santa Barbara council adopts two-year financial plan, approves FY2026 budget after split votes

The Santa Barbara City Council on June 17 adopted a two-year financial plan for fiscal years 2026 and 2027 and approved the operating and capital budget for fiscal year 2026 after several contested votes and extended council deliberations.

Budget staff presented a package that includes adoption of the two-year plan, the single-year FY2026 budget, an appropriation (Gann) limit resolution, fee and penalty schedules, updates to the city—s classification and salary schedule, continuation of multi-year capital appropriations, and authorization for the public works director to execute water purchase agreements. Natalia Glusack, the city—s budget manager, told council, “We are looking at a recommended use of reserves in 2026 of $1,600,000,” and said that meeting the city—s 25% reserve policy would require an additional $4.4 million, pushing a combined shortfall to roughly $6 million in 2026 and a projected $8.4 million deficit in 2027.

Why this matters: the adopted budget uses limited reserves to fund community…