Santa Ana faces projected $17 million budget deficit by next fiscal year
Santa Ana is facing a $17 million budget shortfall going into the next fiscal year, prompting warnings from city officials that services could be scaled back.
That deficit is expected to balloon to $40 million by the start of the 2022-23 fiscal year, according to a presentation finance officials gave to the City Council at a special meeting Feb. 5.
Despite revenue growth, the city is looking at a $9.3 million deficit for the current fiscal year, which ends June 30.
Most of the funding gap is due to rising salaries and pension costs for city employees approved by the council last year, according to city staff. Santa Ana’s current pension cost is $45 million and is expected to increase to $52.3 million next year.
“So clearly, that’s not sustainable to have expenditures exceed your revenues,” said City Manager Raul Godinez. “The budget is limited and becoming more limited as we go on. We really need to tighten our belts”
Godinez said city leaders need to focus on identifying the city’s “core services.” A big chunk of the city’s budget goes toward public safety.
The council in July approved a one-year, $3.8 million contract with the Santa Ana Police Officers Association, the union that represents the city’s rank and file officers. The union spent about $300,000 endorsing several council candidates last year, including Mayor Miguel Pulido and council members Jose Solorio and Juan Villegas.
Deputy City Manager Robert Cortez gave no specifics on what services, if any, could be targeted for cost-cutting.
“We intend to take a multiyear and multifaceted approach to addressing this shortfall and will be using the rest of this fiscal year and next fiscal year to look at different options,” he said.
Suggestions raised at the meeting included asking voters to increase the city’s sale tax and paying more for trash collection services.
Martinez criticized the city for continuing to use about $15 million in sanitation funds for general fund services.
“It’s not legal to continue to take these sanitation funds,” Martinez said. “You’ve got to go to the voters.”
Removing that money would further contribute to the city’s financial woes, city staff said.
Councilman Sal Tinajero proposed legalizing marijuana cultivation and manufacturing to generate revenue, which could bring in $11 million to $20 million annually to the city.
“Why aren’t we jumping all over this opportunity?” Tinajero asked.
Other suggestions by council members included luring manufacturing companies to the city and adopting more business-friendly policies, adding more code enforcement officers and charging developers for expedited services.
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