Santa Monica City Council to discuss FY 2025-27 biennial budget, financial challenges May 27

May 13, 2025 2:49 PM
by Oscar Santiago

At its regular meeting on May 27, the Santa Monica City Council will hold a study session to discuss the fiscal year 2025-27 biennial budget.

Balancing the budget poses an additional challenge this cycle, with the city anticipating an operational deficit, requiring the use of $60.5 million, over the five-year forecast period, of the city’s already depleted reserves.   

While the city was initially optimistic about its economic recovery and a rebound in global tourism post- pandemic, this has not materialized, and revenues that the city relies on for its operations – including sales tax, transient occupancy tax and parking fees – have remained flat or gone down.

This is compounded by unprecedented legal liabilities, potential tariffs and funding uncertainty from shifts in federal government policies.

Santa Monica is not alone in these challenges – these pressures are also affecting our regional neighbors and the state, with many jurisdictions having to make difficult budgetary decisions.

Given this environment, the city’s proposed FY 2025-27 budget is focused on:

The next two years will be a challenge, following an already difficult past few years.  

But Santa Monica’s long-term future remains positive, with significant investment in the city’s hotels and housing stock, a world class Pier and beach, and the reimagining of the Santa Monica airport underway. 

Under the guidance of the City Council, the city is pushing forward with a commitment to a strong, vibrant and resilient future.  

See the proposed FY 2025-27 budget here.

Authored By

Oscar Santiago
Finance Department Director

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City Management, Council And Commissions, Strategic Priorities, Your City Hall