Despite facing a $47 million budget deficit, California’s fifth-largest city is poised to have the largest budget it has ever had.
Thursday, Mayor Jerry Dyer revealed his proposed Fiscal Year 2025 budget to the Fresno City Council, which comes in at $2 billion.
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The big picture: Dyer’s proposal sets the general fund at $483 million, an increase of $21.3 million from the prior year.
- The record budget is poised to be fueled by $189.8 million in property tax revenue, $147.7 million in sales tax, $23.2 million in business license fees, $15.7 million in the transient occupancy tax and $96.9 million in other revenues.
- Dyer’s administration also projects $7.1 million in revenue from the city’s cannabis tax, but projections in previous years have so far failed to come close. The city projected $5.38 million in revenue from the cannabis tax in Fiscal Year 2024 but is only collecting $2.26 million. The Fiscal Year 2023 budget planned for $5.3 million in cannabis tax revenue but had to be adjusted to only $2.1 million.
Driving the news: The driving factors behind the $47 million deficit include the city’s annual salary costs coming in at $32.2 million, workers compensation at $10.5 million, pension costs at $8.6 million, liability insurance at $7.2 million and health and welfare costing $5.7 million.
- Fresno also faces an increase in PG&E costs to the tune of $4.8 million, as well as $4.9 million in firefighter funding rolling over to the general fund that was previously taken care of by the Staffing for Adequate Fire and Emergency Response (SAFER) grant.
Potential cuts: While Dyer plans to allocate $17.5 million in one-time American Rescue Plan Act funding to help offset the deficit, his administration has to tighten the belt to present a balanced budget.
- One such cut would come in the fire department, with plans to reduce staffing at three fire stations from four firefighters to three at a time.
- But that idea already faced opposition among the council in Thursday’s brief hearing, signaling a fight to come next month.
What we’re watching: Dyer’s budget proposal that he presented Thursday will likely look quite a bit different from the one that is ultimately adopted by the city this summer.
- The city council will pick apart the proposal through a series of budget hearings in June to put its own touch on it.
- Fresno faces a June 30 deadline to adopt the new budget.
What they’re saying: “Under the charter it’s my responsibility to provide a balanced budget to the council, knowing full well that is my budget, but at the end of the process come June 30 it is our budget as a city. It’s the council and the mayor’s budget collectively,” Dyer said. “And I know we will be out of balance like it happens just about every year, but then we can work closely together to make sure that we get back in balance by June 30. I know each councilmember has individual needs in their district that certainly aren’t met within our proposed budget at this point. So we’ll look forward to working with each of you to make sure those needs are met.”
