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Independent review warns Santa Barbara faces $21 million general fund shortfall by FY2030
Summary
NHA Advisors told the Santa Barbara City Finance Committee that a baseline five‑year forecast projects expenses outpacing revenues, producing about a $21 million gap by fiscal 2030 unless assumptions or spending change. The review praised current forecasting practices and flagged salaries, benefits and property tax assumptions as key drivers.
Santa Barbara’s finance committee received an independent review on April 22 that projects the city’s general fund could face an approximately $21,000,000 shortfall by fiscal year 2030 under baseline assumptions.
The report, presented by Christian Sprunger, vice president of NHA Advisors, used the city’s fiscal 2025 midyear budget as a base and ran a five‑year dynamic model focused on operating revenues and expenditures. The review concluded the city’s current forecasting practices are sound but that “future budgetary stress and deficits” are likely unless revenues or expenses change.
NHA’s baseline assumes 2% annual growth in sales and use tax, 4.5% annual growth in property tax, 1.5% growth in transient occupancy tax, and conservative growth rates for service charges and interfund reimbursements. Under those assumptions, NHA projected expenditures would outpace revenues enough that the general fund balance is drawn down through fiscal 2029 and would be negative by fiscal 2030. “Based on our independent review and our findings, we think the city’s current forecasting…
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