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Santa Rosa projects $19.3 million general fund deficit for FY25-26 as sales tax falls and costs rise
Summary
City staff presented a preliminary FY25-26 forecast showing a $19.3 million budgeted deficit driven by a $5.5 million sales-tax reduction, rising salaries and benefits, and the end of ARPA support for homelessness services. Departments will return reduction proposals and the council will review study sessions in April and May.
Veronica, staff member, presented the Santa Rosa City preliminary fiscal year 2025–26 forecast to the finance subcommittee and said the proposed general fund deficit for FY25-26 is $19,300,000.
"In fiscal year 25, 26, we have a $19,300,000 deficit," Veronica said. She described the outlook as driven by two main factors: slow revenue growth and sharply rising expenditures.
On the revenue side, staff expect roughly $3,000,000 from recently passed tax measures, continued property tax growth of about 5% (approximately $3,600,000), and a planned reduction of the sales-tax budget by about $5,500,000 after consultant review. Planning and recreation fees show no net increase in the proposed budget because many projects were grandfathered under previous fee schedules and development activity has shifted toward…
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