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Monterey council declares fiscal emergency and places 0.375% sales tax on June ballot
Summary
Facing a multi‑million‑dollar structural deficit, the council unanimously declared a fiscal emergency and voted to put a 0.375% general sales tax — nine‑year measure — on the June 2, 2026 ballot to preserve city services. Supporters cited timing constraints; opponents urged spending cuts instead.
The Monterey City Council unanimously declared a fiscal emergency on Feb. 17 so it could place a temporary 0.375% local transactions and use tax before the county’s special‑election deadlines.
Finance Director Raphaela presented five‑year forecasts and staff’s recommendation to ask voters for a nine‑year supplemental sales tax that staff estimates would raise roughly $4.5 million per year for general fund services if approved. Council members discussed the legal standard for declaring a fiscal emergency and how such a declaration interacts with the Neighborhood & Community Improvement Program (NCIP) funds. City attorneys noted the declaration is a distinct procedural finding that permits certain actions but that any reallocation of voter‑approved NCIP funds would require a separate council action and a higher vote threshold.
The council then voted unanimously to call a special election for June 2 and to request county consolidation. Council and staff emphasized they would still pursue internal expense reductions and long‑term structural changes, but staff said placing the measure in June was necessary to give the city a timely revenue option to address next fiscal year’s projected shortfall.
Public reaction at the meeting was split. Several taxpayers and civic activists urged deeper internal cuts to wages and benefits before asking voters for new taxes. Others — labor leaders, neighborhood representatives and tourism stakeholders — urged the council to send as many concerns as possible to voters and to preserve emergency services.
What comes next: The city attorney’s office will finalize measure language and file it with Monterey County by the February/March filing deadlines for a June 2 consolidated special election. If the measure qualifies for the ballot, the city may use staff time for factual voter information but may not use city resources to campaign for passage; individual council members retain their personal right to advocate for or against the measure.
