Title
Receive the Fiscal Year 2025-26 Recommended Budget.
Report
RECOMMENDATION:
It is recommended that the Budget Committee receive the Fiscal Year 2025-26 Recommended Budget.
SUMMARY:
The Fiscal Year (FY) 2025-26 Recommended Budget includes $2.3 billion in expenditures, offset by revenue of $2.2 billion and fund balance use of $69.2 million for all funds, offices/departments and programs. Next fiscal year, appropriations increase $255.3 million (12.7%) over the current year adopted budget. Total authorized positions of 5,780.9 represent a 116.7 (-2%) decrease from the current year’s adopted budget. This spending plan provides funding for 23 offices/departments in the General Fund, as well as programs and services in other major funds including the County’s hospital, the Emergency Communications Department, and the Monterey County Free Libraries. The Recommended Budget will be presented to the Board of Supervisors for consideration at the public budget hearings scheduled to commence on May 28, 2025.
DISCUSSION:
In March, the County Administrative Office presented the Financial Forecast, which estimated a deficit of $43.3 million for FY 2025-26 due to cost pressures, mostly attributed to wage increases stemming from approved labor agreements and backlogged base wage study implementations, rising pension, and health care costs. Additionally, funding gaps emerge due to elimination of one-time funding solutions used in the FY 2024-25 Adopted Budget including $5.2 million of Unassigned Fund Balance and $10.4 million from the suspension of the supplemental UAL contribution to fund ongoing costs. Furthermore, some departments will lose revenue specific to their programs, further impacting operations. Although discretionary revenue grows $11.1 million next fiscal year, cost pressures continue to outpace ongoing resources. Preparing a balanced spending plan for next fiscal year was particularly challenging given the combination of increasing costs and limited reve...
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