Chino Hills council adopts 2026–27 budget, directs staff to study revenue options including possible sales tax

The Chino Hills City Council adopted its 2026–27 operating and capital budgets following a staff presentation that warned reserves could be exhausted by 2029–31 under current assumptions. The council voted 4‑0 to approve the budgets and to direct staff to develop and return with revenue‑enhancement options, including the possibility of a local transaction/use tax, at the first council meeting in July.

City Manager Jared Hill told the council the proposed budget anticipates roughly $158 million in total revenues and about $157.1 million in expenditures across all funds; for the general fund the staff estimate is $59.2 million in revenues against $63.5 million in expenditures, producing a $4.3 million deficit for 2026–27. Hill said the administration plans to use reserves to balance the coming year but warned that without new revenue the projected gap grows over time and reserves could be exhausted around fiscal year 2029–31.

Why it matters: Council members said the shortfall is real and requires choices about new revenues or service reductions. Mayor Jones emphasized the limited share of property‑tax dollars the city receives, saying, "Chino Hills, we get 4¢ out of every dollar," a point repeated by other council members as context for constrained local revenue. Assistant City Manager reported the general fund reserve balance is projected at about $25.4 million at the end of 2026–27.

Council discussion focused on options staff outlined: a voter‑approved local transaction/use tax (commonly called a sales tax), a business license tax (which requires voter approval for the level proposed), modest user‑fee adjustments (limited by law to cost recovery), and pursuing state legislative relief on property tax allocations (a longer, uncertain path). Staff said a 1‑cent (1%) local transaction/use tax would largely be borne by nonresidents who shop in Chino Hills and estimated it could generate roughly $11 million to $20 million more in local sales tax receipts depending on rate and assumptions.

Public comment included James Allen urging officials to put a sales tax measure to the voters to preserve services. Several residents from a northern neighborhood presented a petition of about 150 signatures asking for better streets and green‑belt maintenance and requested clearer timelines and jurisdictional clarification; councilmembers said staff would follow up.

Councilmember Art Bennett made the motion to adopt the operating and capital budgets, establish appropriation limits and direct staff to present revenue options; the motion was seconded by Councilmember Moran and carried 4‑0. The council explicitly directed staff to return with viable recommendations on revenue enhancement at the first meeting in July.

Next steps: Staff will prepare the revenue options and outreach plan requested by the council and present them at the first July meeting. The votes and formal actions taken tonight were limited to adopting the budgets and directing staff; any tax measure would require a future council decision to place it on the ballot and voter approval.