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Santa Barbara staff propose balanced use of Measure I revenue; housing advocates press for larger housing allocation
Summary
City staff briefed the Santa Barbara City Council on options for spending Measure I sales-tax revenue—estimated at about $15.1 million annually—and recommended restoring some frozen positions, preserving library hours and setting aside $1–$2 million a year for the Local Housing Trust Fund as the starting approach.
City staff briefed the Santa Barbara City Council on Jan. 28 on options for spending revenues from Measure I, the half-cent sales tax the city’s voters approved in November 2024. City Administrator Kelly McAdoo and Finance Director Demartini told the council Measure I is projected to generate about $15.1 million a year and that including it in the fiscal-year 2026 forecast would turn a previously projected $10.7 million operating shortfall into an estimated $4.4 million surplus.
The staff presentation framed the tax as intended to “maintain essential local services” and recommended three parallel uses if council wants to preserve current service levels: restore certain frozen positions (including several police positions), continue expanded library hours previously funded by one-time federal dollars, and commit a set annual allocation into the Local Housing Trust Fund. Staff proposed a starting housing allocation of $1 million to $2 million per year and said the city could explore percentage-based or graduated approaches if Measure I revenues exceed estimates.
Why it matters: Council members and the public repeatedly returned to three interlocking constraints—uncertainty about future federal and state funding (including recent pauses in some federal programs), an ongoing citywide classification-and-compensation study that may raise salary costs, and recommendations from an impending fire department standards-of-coverage review that could add recurring costs. Staff emphasized the need for flexibility so the budget can respond if federal grants are cut or if the studies produce larger-than-expected cost increases.
Public and advocacy response: More than a dozen speakers from tenant groups, affordable-housing nonprofits and faith-based organizations urged the council to direct substantially more Measure I money to housing. Speakers asked the council either to (a) allocate a defined chunk of Measure I annually—advocates cited figures in the 30–35% range—or (b) place a $5 million baseline in the Local Housing Trust Fund to maximize matching opportunities with state programs. Housing advocates said any stable local contribution improves the city’s ability to win state funds that require local matching. Tenant-rights speakers also urged rent protections, including a cap on post-remodel rent increases.
Council discussion and next steps: Council members asked technical questions about how an allocation would be recorded and whether money moved into the Local Housing Trust Fund could be pulled back for other uses. Staff and the city attorney advised that funds can be transferred between city accounts but warned that moving funds into restricted accounts can make them harder to reallocate later. Several councilmembers favored staging or earmarking a modest dedicated housing amount now while retaining flexibility to scale allocations in the FY2026 budget process. Multiple members stressed the need to reserve funds for implementing the upcoming class-and-comp and fire standards recommendations.
The council did not adopt a final allocation on Jan. 28. Staff sought—and received—direction to continue outreach and to return to the council with detailed budget proposals and implementation options during the FY2026 budget process in April–May.
