The Sacramento City Council has adopted the Fiscal Year 2026/27 operating and capital budgets, advancing City Council priorities while continuing efforts to address the City’s structural deficit and strengthen long-term financial sustainability.
The adopted budget totals $1.7 billion across all funds, including an $898.3 million General Fund, and supports essential City services and operations.
The budget reflects months of community engagement, Council workshops and public hearings and closes a $66.2 million General Fund gap through a combination of expenditure reductions, operational efficiencies, funding shifts and revenue strategies.
“This year, the City Council tackled a tough budget process, but we started early to ensure community input,” said Mayor Kevin McCarty. “Last year, we picked the low-hanging fruit by sweeping reserves and vacant positions. Unfortunately, while deeper cuts were made with this budget, we built a stronger foundation for future budgets and protected what is most important for the City of Sacramento: our employees and core City services. We were also able to restore $4.5 million in services that will have a profound impact, including wading pools, youth programs, and violence prevention programs. Tomorrow, we will continue focusing on growing our economy so we can provide more for our community in the future.”
A significant focus of the budget is reducing the City’s structural deficit. Approximately 75% of the budget-balancing solutions are ongoing, helping lower projected deficits in future years and reducing reliance on one-time measures.
“This budget required difficult decisions and trade-offs, but it reflects a thoughtful approach to addressing Sacramento’s structural deficit while continuing to invest in our community,” City Manager Maraskeshia Smith said. “We are making meaningful progress toward long-term financial stability, and that puts the City on a stronger path forward.”
The budget maintains a focus on advancing City Council priorities — economic development, homelessness and public safety — while continuing to deliver core services.
Key investments include the creation of a new Economic Development Department which will lead efforts to attract investment, support business growth, expand job opportunities and strengthen Sacramento’s long-term economic competitiveness.
The budget maintains a focus on public safety and homelessness by preserving core police and fire services and continuing homelessness outreach and shelter operations.
The adopted budget also includes funding for capital improvement projects that maintain and improve City infrastructure, facilities, parks, streets and other community assets.
The City entered the budget process facing ongoing financial pressures driven by rising personnel costs, inflation and slowing revenue growth.
Through the adopted budget, the City has taken meaningful steps to improve its long-term financial outlook while continuing to provide essential services to residents. While structural budget challenges remain, the actions taken in this budget reduce projected future deficits and represent significant progress compared to the gaps the City has faced in recent years.
The Fiscal Year 2026/27 budget takes effect July 1, 2026. Additional information is available on the City’s website.