Fresno is forging ahead with another record-breaking budget even as it deals with a $34.5 million deficit.
Mayor Jerry Dyer unveiled his Fiscal Year 2026-2027 budget proposal on Wednesday, balancing the largest budget in city history at $2.55 billion while acknowledging the significant challenges to avoid layoffs.
Flashback: Dyer noted in February that the city was on track for its third consecutive year of deficits, projecting the upcoming deficit to be around $23 million as increasing revenues simply could not catch up to the rising expenditures.
What he’s saying: “This budget this year, although challenging, was built with a lot of creativity and thoughtfulness,” Dyer said.
- The mayor said the city has a strong financial outlook based on increasing revenues, sound financial management and a very healthy reserve.
- “I am pleased to report that revenues are trending upward year-after-year, which is good news for the City of Fresno,” Dyer said. “Unfortunately, they’re not trending upward at the same pace as our expenditures are being made. So we have expenditures outpacing revenues.”
- Dyer said the city no longer has American Rescue Plan Act funds to fall on as it did in previous years, a factor in the increasing deficit.
- Among other factors, Dyer added that the City Attorney’s Office did not receive an anticipated grant for its Wage Theft Unit that would have funded eight positions, forcing the city to absorb that spending in the General Fund.
- Dyer said his budget proposal does not impact any essential services.
By the numbers: The largest chunk of the budget is set aside for The Department of Public Utilities at $490 million 19.3% of the total budget.
- Public Works comes in just behind at $466 million – $18.3% of the budget.
- The police department is the only other category to draw a double-digit percentage with an allocation of $308 million, coming in at 11.8%, while Fresno Area Express is drawing $244 million, 9.6% of the budget.
- As Dyer said, the revenue forecast paints a better picture for the city. Property tax is expected to increase by 5.94%, sales tax will be up by 2.8%, business licenses fees will increase by 3.76% and the city also expects room tax revenue to be up by 6.09%.
Zoom in: Dyer’s budget proposal contains $1 billion to support 470 major capital improvement projects, including a 911 communications center, a fire station, a regional fire training center and a senior center.
- It also includes $74.8 million in road maintenance and sidewalk repair that comes from the Pave More Now initiative as well as Measure C and state funding. That money is in addition to the $65.9 million to be completed or awarded by the end of the year.
- The Police Department will have the only new positions in Dyer’s proposed budget through the General Fund, allowing for one sergeant and five officers for another Homeless Assistance Response Team.
- Dyer also expects to have $49.1 million in Measure P funding at the city’s disposal, along with $67.8 million in unspent Measure P money that is left over.
What’s getting cut: In order to balance the budget, Dyer said the city will assume an attrition rate of 6.18%, which he called the natural vacancy rate of the time that it takes the city to replace employees.
- That attrition rate applies to all departments except to the Fire Department. Dyer said the city would have to utilize overtime to pay for those positions that would have been kept vacant.
- Dyer is also calling on departments to cut their spending by 5%, a tool his administration has used in past years in the face of deficits.
What we’re watching: After unveiling his budget to the public on Wednesday, Dyer will present it to the Fresno City Council on Thursday, setting up the budget hearings that will dominate City Hall throughout June.
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