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Merced City reports decline in cannabis tax revenue; draft budget directs funds to code enforcement, fire and parks
Summary
Staff told the commission Measure Y cannabis-tax receipts have fallen versus the prior year; the recommended budget earmarks 20% each to police, fire and parks, with discretionary funds limited to those areas and specific items including code-enforcement positions and fire equipment.
City staff reported continuing declines in Measure Y (the city’s cannabis tax) receipts and presented a manager-recommended budget for fiscal 2026–27 that designates 20% each to police, fire and parks/recreation and leaves 40% discretionary so long as those dollars are spent on those three areas.
"So for Measure Y, the requirements are that the police needs to get 20% of that, fire needs to get 20% of it, parks and recreation needs to get 20%, and then 40% of that is discretionary, but it can only go to those 3 areas," the presenter said.
Staff estimated Measure Y receipts at roughly $1.6 million for 2026–27 with an estimated June 30 balance of $406,000 after proposed expenses. The presentation identified specific allocations: $100,000 for five part‑time code‑enforcement positions and $75,000 for unanticipated fleet repairs within the police allocation; $120,000 to buy two cardiac monitors and $11,000 for a narcotics safe for fire services; and roughly $196,000 tied to youth sports and programming partnerships for parks and recreation, aided by grants and a three‑year donation for a zookeeper position.
Staff noted past transfers of operating budget lines into Measure Y (about $125,000 last year) and said some one‑time purchases and carryovers would complete facility projects such as Fire Station 51 and 52 renovations.
The commission unanimously voted to accept the Measure Y report and the manager-recommended Measure Y presentation as information.
