City of Santa Barbara Weighs Budget Priorities for Two-Year Fiscal Plan

Measure I Kept City from Making Major Cuts, Though Federal Funding Shortfalls May Impact Future

Santa Barbara City Council will be going through budget deliberations from May through June 2025 | Credit: Ingrid Bostrom

The City of Santa Barbara is maintaining a “status quo” budget for the next two fiscal years, with no major changes as the city will be able to maintain services without making cuts due to the influx of an extra $15 million a year in Measure I sales tax revenue.

Finance Director Keith DeMartini provided a breakdown of the city’s two-year financial plan for City Council Tuesday, including an outline of each department and an update on the plan for the first full year of the Measure I sales tax funding. The budget presentations were just the first of several meetings over the next few months, with the council deliberating, setting budget priorities, and adopting the finalized budget in June.

City Administrator Kelly McAdoo introduced her plan to fold a host of programs — Housing and Human Services, Affordable Housing, Community Development Block Grants, Rental Housing Mediation, Downtown Parking, and other community initiatives like the State Street Master Plan — under a newly created position in the City Administrator’s Office. The new Deputy City Administrator will be in charge of all of these programs, and McAdoo said that the change would be strictly structural, with no expected cuts to any positions.

Measure I funding played a major role in the city’s ability to stay above water, with the extra $15 million a year making up for a shortfall in other areas, allowing the city to maintain dozens of positions that would have otherwise been unfunded. “If we didn’t have Measure I, we would have had to have laid off 34 police officers in order to balance the budget,” McAdoo said.

The Police Department is getting the largest portion of Measure I revenues, with about $6.3 million going toward funding those 34 positions. The Fire Department will get $3.5 million to fund 19 existing positions, while Parks and Recreation and the Library will receive more than $950,000 each. The remaining money will be split between the Local Housing Trust Fund and Housing and Homeless Services, with each receiving a transfer of $1.5 million.

Uncertainty over the future of federal funding also hung a shadow over the budget deliberations. The city receives about $1.5 million a year in federal funding through housing assistance and Community Development Block Grants (CDBG) programs, which are both on the chopping block at the national level.

Measure I Sales Tax revenue will bring in an extra $15 million a year towards public safety, parks, and housing and homelessness. | Credit: City of Santa Barbara

Housing Authority Executive Director Rob Fredericks said the federal cuts could amount to as many as 500 households losing their rental assistance in Santa Barbara, likely forcing many into homelessness. “I recognize this is a tough balancing act, but now is not the time to retreat from the essential community investments that are needed — especially affordable housing,” he said.

During public comment, Fredericks and other housing advocates encouraged the City Council to consider using its reserves to get the Local Housing Trust Fund to at least $5 million, a threshold that could help the city get matching funds for a more substantial number of affordable units.

Councilmember Kristen Sneddon said she would support a plan to use any additional unspent funds, reserves, or surplus revenues to help the housing fund, especially with all the uncertainty over federal funding. But she wanted to make sure that it didn’t become a debate over funding either housing or public safety.

“I don’t believe it’s a choice between affordable housing and public safety; I think we have room for all of it,” Sneddon said. “We need to have both.”

The council did not take action on Tuesday, though council deliberations will continue with budget setting priorities on June 3.

Councilmember Eric Friedman has been absent for a month after suffering a heart attack in April, but according to a statement released by his family, Friedman has been recovering well and is expected to return to his council duties — albeit virtually — beginning next week, May 13.

“We are so glad Eric is back — walking the dog, reading on the porch, and representing his friends and neighbors on the City Council,” the family statement read. “Hopefully soon, we will also see him back at Trader Joe’s, which he misses a lot.”