Santa Barbara City Council had spent the past several weeks working out budget details, so Tuesday’s adoption of the budget was assumed to be a mere formality. Updated projections that the city would be in a $1.6 million deficit, however, raised last-minute concerns, though the council ultimately approved the budget in a 4-3 split vote.
The major point of contention throughout the budget planning process had been the request to allocate $5 million per year toward the city’s affordable housing trust fund. On June 10, the council voted 6-1 to allocate an extra $2 million from the city’s reserves to meet the target in 2026, and voted 4-3 for a second allocation of $2 million in 2027.
Mayor Randy Rowse and Councilmembers Eric Friedman and Mike Jordan all had reservations about dipping into the reserve fund. Cuts to the federal and state budgets could leave the city in a tight spot, they argued, and with two bargaining units set to begin labor negotiations next year, the city may need financial wiggle room.
Updated projections provided by Finance Director Keith DeMartini, which factored in the latest budget changes, added another level of complexity. In each of the prior budget hearings, the council had been told the city would have a $700,000 surplus in Fiscal Year 2026, but now, a $1.6 million deficit was predicted.
DeMartini also warned that several million in federal funding would be lost and would have to be replaced with appropriations from city funds or reserves in the future.
Councilmember Friedman said he was unsure about moving forward with the additional funding coming from the city’s reserves.
“I’m more uncertain about that now,” Friedman said. “I would have liked to be able to vote for the whole budget, except for that one piece of it.”
Councilmember Jordan attempted to separate the approval into a multiple-motion process that would have led to a vote on the budget without the appropriations for the housing fund, then force the council to return on July 1 with a resolution to reallocate the $2 million per year.
The overcomplicated idea failed to come to reach a consensus, with Jordan ultimately pulling the motion. “This is like torture,” he said at one point, suggesting the council move forward with a vote even if it wasn’t unanimous. “Let’s just … move on.”
Mayor Rowse remained firm in his opposition to dipping into reserve funds. “We’re voting for something that’s going to be damaging to our budget, but is not going to have as much punch as some people like to think it does,” he said.
Councilmember Wendy Santamaria replied: “I will respectfully disagree with you, Mayor Rowse. I think this is going to be a wonderful investment in our community.”
The budget plan was adopted in a 4-3 vote, with Rowse, Friedman, and Jordan opposed. The two-year plan includes adjustments of $100,000 toward the creation of a new wildland fire suppression district and the transfer of $2 million per year into the city’s Local Housing Trust Fund.
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