A balanced general fund budget with $249.6 million in revenue and $249.1 million in spending for fiscal 2026-27 was presented Tuesday to a pleased Carlsbad City Council.
Read more Chula Vista council approves $80 million bond issuance for Otay Ranch affordable housing project
The general fund covers the city’s everyday expenses such as personnel, public safety, libraries and the maintenance of streets, parks and buildings.
Budgeted expenses in the year that starts July 1 are expected to increase 2.8%, less than the statewide inflation rate of 3.7%. Also, Carlsbad plans to increase its general fund reserves to $145 million, well above the minimum set by its financial policy that states reserves should be 40% of the general fund or $100 million for next year, staffers said.
“We are clearly in a strong financial position, and that’s due to the work that you all put in,” said Councilmember Priya Bhat-Patel.
The proposed budget shows the city is “a responsible steward of taxpayer dollars,” she said, and that “We’ve been doing a good job at being consistent and living within our means.”
A final version of the budget will be presented to the City Council for approval after a public hearing at a meeting June 16.
Carlsbad has been tightening its fiscal belt in recent years. For example, the city recently stopped automatic increases in department budgets based on inflation. Instead, specific requests must be considered individually.
In 2024, the city eliminated the equivalent of 12 full-time positions to balance its 2024-25 budget at just under $240 million. Most of the jobs cut were already vacant, and some of the responsibilities in those jobs were transferred to other departments. Two of the lost jobs were full-time, occupied positions.
Next year’s proposed budget includes 812 permanent full-time employees, an increase of one employee from the budget for fiscal year 2025-26, according to a staff report. Also, there is a proposed increase in part-time employees equal to 4.59 full-time staffers, for a net increase of 5.59 full-time-equivalent employees.
Read more Fatal head-on crash in Julian leaves 1 dead, 4 injured
The general fund total of $243 million approved last year was a 1.8% increase from fiscal 2024-25.
“For the second year in a row, the proposed general fund budget increase remains below the regional inflation rate, while continuing to maintain strong reserves, delivers on City Council priorities and invests in the services and infrastructure our community relies on every day,” City Manager Geoff Patnoe said in his presentation to the council.
“Continued inflationary pressures and lower consumer confidence all create uncertainty that can ultimately affect city revenues, particularly recent sales tax performance and because of that, we are continuing to plan cautiously,” Patnoe said.
“The proposed budget continues the city’s targeted investments in public safety, infrastructure, capital improvements, sustainability and maintains the high level of service our community expects, while positioning the city to remain financially stable in the years ahead,” he said.
Property taxes are the largest source of the city’s revenue. That amount is expected to grow from an estimated $100 million this fiscal year to just under $105 million in 2026-27, an increase of 4.6%.
Sales taxes are the second-biggest revenue generator. That number is expected to go from $54.4 million this year to $55 million next year, an increase of 1.2%, according to the staff report. The hotel room levy known as transient occupancy tax, in third place, is forecast to increase from $35.6 million this year to $35.7 million next year, a 1% increase.
Personnel costs are the largest expense in the general fund budget. For Carlsbad in 2026-27, that is expected to be $158.2 million, up from $145.6 million last year, an 8.7% increase, the report shows.
Maintenance and operations, the second-largest expense, are expected to decline from $70.4 million this year to $69.3 million in 2026-27, a change of -1.6%. Capital outlays and financial transfers also are expected to decline.
Read more Missing Pauma Valley man whose vehicle was found in Temecula identified as homicide victim
