Santa Ana officials warn of looming budget gap; Measure X extension polling looks favorable

An overview of Santa Ana’s finances presented at a Jan. 23 council workshop said the city faces a structural budget challenge as sales‑tax growth has flattened and long‑term obligations rise.

The finance presenter told the council that without changes the city’s 10‑year model shows a budget shortfall and staff “do expect a deficit this coming budget cycle,” adding that “we could be starting the next budget process with up to a $20,000,000 deficit.” The presentation cited several drivers: a $2.2 million increase in the CalPERS required contribution, lower‑than‑expected sales‑tax growth, OCTA streetcar cost estimates that may be close to $2 million annually (up from about $1 million in earlier assumptions), and OCFA’s request that the city consider a dedicated paramedic unit at roughly $2.5 million.

Staff reviewed Measure X—the city’s local sales tax approved in 2018—and said it produced measurable service gains, including added staffing and investments in parks, public safety contracts and infrastructure. The city’s pollster, Tim McClarny of True North, told council members that an initial ballot test showed 64% approval for a proposed extension; retests ranged from 63% to 67% and tested alternatives showed results within the poll’s margin of error. Staff said a November 2026 ballot timeline is under consideration to take advantage of expected turnout dynamics.

Council members pressed staff for more detail on the poll, and for clearer estimates of the fiscal impact of potential choices. The presenter said the ten‑year outlook assumed a $4.2 million sales‑tax increase that now looks unlikely and that actuarial pension changes increased next‑year costs by $2.2 million. The presentation recommended the council frame budget discussions around “must have, should have and nice to have” priorities and noted staff will return with more detailed department‑level data during the regular budget process.

What comes next: staff will release the full polling report and provide department‑by‑department figures to support midyear and May budget discussions. The council did not take any binding action at the workshop.