Going For Broke
City budget is in shambles, but here are solutions
By Jeff Harris
August 2025
The city of Sacramento budget is a hot, unsustainable mess.
Although the City Council adopted a balanced budget for the fiscal year, there’s a structural deficit that can’t be ignored.
Budget staff, led by a competent finance director, Pete Coletto, gave the council options on how to close a $66 million deficit. Unfortunately, projections show the deficit will increase over the next four years.
What does this mean for you?
It means a City Council desperate for new revenue will try to pass a sales tax increase and hike up business operations taxes.
Voters will be expected to tax themselves for a council that doesn’t practice fiscal restraint.
The result is fewer city services at greater costs. Higher parking fees. Fewer police officers. Poorly maintained parks. Deteriorating roads.
It means a marginally functioning city. That’s where Sacramento is headed.
How did this happen? Costs rose and revenues leveled off. But a deeper answer is found within interim City Manager Leyne Milstein’s budget message.
She writes, “The structural deficit is the result of decisions that the city and the voters have made over the past few years. These decisions include expanding into new service areas, increased costs of new labor contracts, increasing staffing levels and ballot measures redirecting general revenues for specific purposes.”
In plain language, Milstein is saying the City Council gave unions big, unsustainable raises. The council put Measure L, the “Children’s Fund,” on the ballot. And it passed.
Measure L steers significant tax dollars away from the general fund and into youth service nonprofits.
On top of that, former Mayor Darrell Steinberg convinced the City Council to pay for many pet projects.
Rather than just complain about the City Council’s fiscal ineptitude, I’ll propose some bold actions to repair the budget.
Immediately recover $9.7 million in unspent funds for “Youth Workforce Development,” a Steinberg program. Most of the money has gone to remedial math education, not job preparedness. It’s ineffective.
Abolish the Office of Public Safety Accountability and position of Inspector General. This department has done nothing the police chief doesn’t already do better.
Abolish the FUEL network and Ryde Free RT programs. These aren’t city responsibilities.
Reduce City Council office budgets by $250,000 and salaries by $14,000. Reduce the mayor’s office budget by $500,000.
If councilmembers are serious about correcting a fiscal disaster, they will follow these straightforward recommendations.
Here are other pathways to savings. The Community Workforce Training Agreement should be rescinded. Adopted in 2018, this agreement requires union labor for city projects more than $1 million.
The agreement reduces or ends competition in bidding for city contracts. I’m not opposed to unions, but they must prove themselves as good values in competitive bidding situations.
As the council enters new negotiations with unions, it must reject pay-raise requests. Each 1% increase adds $4.8 million to the deficit.
Place a reversal of Measure L on the ballot. The city has no business giving grants to Sacramento City Unified School District or County Office of Education. They have their own budgets to mismanage.
As for youth service nonprofits, they must prove their value before receiving city money. Handouts should not be mandated by city charter.
Taken together, these ideas would save far more than $35 million annually. The savings would protect staff jobs and stabilize the budget.
Is any councilmember willing to propose these bold actions? In this year’s budget discussions, the answer was no.
As the financial squeeze tightens, I hope councilmembers will grow the courage to propose real changes in spending. That’s how Sacramento returns to a fiscally sound place.
So far, there are no signs of that happening.
Jeff Harris represented District 3 on the City Council from 2014 to 2022. He can be reached at cadence@mycci.net. Follow us on Facebook and Instagram: @insidesacramento.
