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Santa Barbara outlines FY2026–27 budget plan, directs Measure I revenue to public safety and housing
Summary
City finance staff presented the city administrator’s recommended two‑year budget overview, saying Measure I sales tax proceeds will provide the first full year of funding for public safety and new housing transfers while the general fund faces widening gaps in later years.
Finance Director Keith DeMartini and Budget Manager Natalia Glusick presented the City of Santa Barbara’s recommended budget for fiscal years 2026 and 2027 to the Police and Fire Commission, focusing on the general fund and the implementation of Measure I.
DeMartini said Measure I, “a half‑cent sales tax that Santa Barbara residents approved in November,” took effect April 1 and that staff projects Measure I receipts of about $15.1 million in FY 2026 and $15.5 million in FY 2027. The finance presentation recommended using those revenues to sustain existing essential services, with specific allocations to public safety, parks and recreation, library services and homelessness contracts.
Glusick outlined the budget development phases and noted the city’s online budget book is available for public review. Staff described the general fund as approximately 30% of total city funds and said that while revenues are still growing, expenditure growth continues to outpace revenue growth over the multiyear forecast.
The Measure I spending plan presented to council includes funding for police and fire staffing previously reduced or frozen: 34 police officers (funded from Measure I in the recommendation) and 19 firefighters. The plan also proposes funding eight parks and recreation positions, five librarian positions, ongoing security and digital collections for the library, and continued contracts with existing homeless service providers where Measure I would fill shortfalls in those contracts. Staff also proposed two transfers: one to a city fund for housing and homeless services under council discretion and another into a newly created local housing trust fund intended for capital related to housing production.
Glusick said downtown parking and related downtown services will be moved under the city administrator in a reorganization that creates a deputy city administrator position. Staff said they will pause most downtown parking capital spending while conducting a large‑scale asset assessment and pilot changes including a small pay‑by‑plate pilot off Helena Street, exploring affordable off‑street parking for residents and discounts for certain employee parking.
On reserves, DeMartini reminded the commission that the City Council’s reserve policy target is 25% of annual operating expenditures; when that target is applied the city shows an operating deficit in FY 2026 despite a small nominal surplus in the forecast without reserve policy adjustments. Staff emphasized continued attention to expenditures and project delivery to keep the budget balanced in future years.
Commissioners asked whether Measure I receipts collected after April 1 but before FY 2026 would be used in the current fiscal year; DeMartini said the collections from April through the end of the current fiscal year will be applied to reduce the FY 2025 projected deficit. Commissioners also asked about downtown services and the new deputy position; Glusick said the downtown ambassador and plaza support programs will roll up into the new downtown services program with the same staff but under new branding and oversight.
The presentation concluded with a calendar for hearings and council deliberations: department‑level reviews and a special council priority workshop in late May followed by budget deliberations and final adoption anticipated in June.
Ending: Staff will bring the recommended budget and Measure I spending plan to the City Council for review and adoption during the scheduled budget hearings; the commission’s discussion and questions were recorded in the meeting packet and the city’s online budget book is available for public review.
