City of Fresno faces $20M budget deficit. Here’s what could be on the chopping block
The city of Fresno has projected a $20 million deficit as it rolls into the later part of the fiscal year, setting up its leaders for potentially difficult decisions over cuts.
The city projects to be spending in the red in the next fiscal year following sluggish sales tax revenue — down $4.5 million — and cannabis tax revenue yielding $4 million less than projected, among other issues, according to a presentation by Budget Director Henry Fierro.
The last few years of city budgets have been buoyed by outside revenue — like the federal American Rescue Plan Act money — that leaders are not likely to see this year, City Manager Georgeanne White said.
A $20 million deficit could mean noticeable cuts even in a city with a spending plan of $2 billion.
“We’re going to have to get creative come budget time to make sure we’re doing everything we can to make sure we keep services as is,” Councilmember Annalisa Perea said.
White said staffers are developing a list of capital projects whose completion date could be pushed back. She said she has ordered that department budgets not ask for increases except for where contractually obligated or where the increase in spending was related to staff safety.
The city has not ordered a hiring freeze but is cautious not to add to the deficit, she said.
“We have internal hiring slow down,” she said. “We are only approving positions that have been absolutely necessary.”
But, city staffing may feel the pinch of budget cuts.
The City Council in 2022 made its police officers the highest paid in the San Joaquin Valley and poured a significant amount into the Fresno Fire Department with raises earlier this year after a boost in firefighters in 2023.
Taxpayers should not bear the brunt of cuts by losing services, Councilmember Miguel Arias said.
As the city continues to negotiate with public safety unions, those employees may not see raises at the same level as recent years because of the lack of revenue, he said.
“I think it’s unfair (and) irresponsible to cut services to residents who pay taxes,” he said.
Councilmember Mike Karbassi said cuts to public safety would be a “non-starter.”
The city of Clovis last year while facing its own difficult revenue outlook, approved a new tax aimed at police, fire and other services.
The final outlook in Fresno for the next fiscal year will likely come before the council in May, when Mayor Jerry Dyer would be expected to present a draft of the spending plan. Budget workshops are in June.
Councilmember Nelson Esparza noted the city’s projections are only an estimate, and the city could be facing a tougher deficit later this year.
“It’s going to be bigger than ($20 million) and we’re going to have to solve it,” Esparza said.
This story was originally published February 20, 2025 at 10:40 AM.
