The City is facing a projected $66.2 million budget deficit as it begins work on the fiscal year 2026–27 budget, as presented to the City Council on Feb. 10.
The deficit is not the result of a recession but rather reflects a long-term structural imbalance in the City’s finances, where ongoing expenses continue to grow faster than ongoing revenues.
“This budget moment requires us to make hard choices, but also smart ones,” City Manager Maraskeshia Smith said. “We cannot cut our way out of a structural deficit. Our focus must be on stabilizing the budget while also growing Sacramento’s economy, improving efficiency and making sure we are delivering the services residents expect.”…