The City of Santa Maria’s budget is set for the next two fiscal years but according to the city, reserve funds will likely need to be used within the first year.
The budget was adopted by the Santa Maria City Council Tuesday night.
The $364 million budget begins July 1 for fiscal year 2024-25 and has reportedly increased 1.5 percent since the prior fiscal year.
“This two-year budget is very challenging with a huge shortfall in revenues to expenses, given the slowing growth of tax revenues and substantial expense increases in staff, salaries and benefits, pensions, inflation, and exorbitant increases in insurance,” the city stated in a press release. “In the past, the City managed to effectively control expenses to bridge deficits. However, in this two-year budget the projected gap has significantly worsened. Interim City Manager Alex Posada said for 2025-26, the City must explore austerity measures, and may introduce service reductions in 2024-25.”
The general fund budget shortfall for the 2024-25 fiscal year is projected at $21.3 million and for the following year, is projected at $20.2 million.
“The budget for the first year will deplete General Fund reserves, Measure U reserves, and draw down the Local Economic Augmentation Fund to a projected $2.2 million,” according to the city.
