Chino Hills projects $2.2 million general-fund shortfall, council weighs sales-tax option

Chino Hills City Manager Ben Montgomery told the City Council at a May 27 budget workshop that the city is proposing a fiscal year 2025–26 budget that spends about $2.2 million more in the general fund than it expects to receive in revenue.

Montgomery said the proposed all-funds budget totals about $148 million in revenues and roughly $150 million in expenditures. The city projects a general-fund revenue of $56.4 million against proposed general-fund expenditures of $58.6 million, leaving a gap Montgomery described as “a planned draw on reserves.” He said unrestricted reserves would remain sizable — roughly $34.9 million — but would decline over a five-year projection if current revenue and spending patterns continue.

The council and staff emphasized that property tax and sales tax are the city’s two largest general-fund revenue sources and that both are effectively constrained. Finance staff warned sales-tax receipts are projected to fall about 2 percent next year and noted the city receives roughly 4 cents of every property-tax dollar collected in the county and about 13 cents of each sales-tax dollar collected by the state. Krista (Finance Director) and consultant HDL briefed the council on revenue drivers and the limits of local control.

Why it matters: Council members framed…