Failure to Make the Hard Financial Decisions on the City’s 2025-2027 Budget
May 19, 2025
By Elaine Roberts Musser and Dan Carson
During the last few years the city has consistently failed to make the hard decisions needed to manage its finances. The proposed new city budget released on Friday is more of the same. What follows are just a few examples of how the latest city budget proposal for 2025-2027 digs the city ever deeper into an embarrassing financial morass.
Having 10.3% and 10.2% reserves for the city’s General Fund for the next two budget years — as the new city budget plan proposes — might suffice in better times. Property and sales taxes are historically stable revenue sources for Davis and other California cities that can enable them to survive troubled times. But a 10% reserve is inadequate for the next two fiscal years given the treacherous economic circumstances the city is in. And coming are the all but certain massive state and federal funding cuts for local government programs.
In earlier budget discussions, City Council’s direction to staff was to get the city’s General Fund reserve back to 15% over the next 2-3 years. That plan is now dead. No specific proposal to get there is being offered — just a vague statement that new revenues or budget reductions will have to be found somewhere. This dire circumstance should trigger immediate action to put the General Fund reserve back on track to 15% in 2-3 years.
Don’t count on that happening, though. Even as these budgetary dangers loom, another item on the Council’s consent agenda for Tuesday would make things worse: the ratification of a very rich and unwise employee contract with the Davis City Employees Association (DCEA). One that will probably set the stage for another wave of contracts for other city employee groups.
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