Sacramento’s $1.7 billion fiscal 2026-27 budget takes effect after deficit fight
Sacramento’s fiscal 2026-27 city budget took effect July 1 after the City Council adopted a $1.7 billion spending plan while the city faced a $66.2 million structural deficit.
The budget now guides current-year city funding for public safety, violence prevention, youth and senior services, homelessness response and economic development. Sacramento Mayor Kevin McCarty’s office said the plan was assembled through additional reductions and prioritization after strategies used in prior budget cycles were no longer available.
Programs protected and reductions planned
According to the mayor’s office, the adopted budget protects violence-prevention programs and programs serving young people and seniors.
The plan also includes what the city described as necessary reductions to its homelessness-response program. Those reductions are paired with reforms the mayor’s office said are intended to improve the program’s cost-effectiveness.
The city’s public summary does not specify the dollar amount of the homelessness-response reduction. It also does not list the individual funding amounts for the violence-prevention, youth and senior programs identified as protected.
That distinction is significant because the summary identifies protections for several service areas but does not say that all city services, or all homelessness-response funding, were maintained at prior levels.
Deficit shaped the budget process
City officials developed the 2026-27 budget against a $66.2 million structural deficit. The mayor’s office said earlier approaches, including sweeping reserves and relying on vacancies, were no longer available as budget strategies.
As a result, the city said it needed further reductions and prioritization in preparing the spending plan. The City Council adopted the $1.7 billion budget in June, before the fiscal-year plan went into effect in July.
The development process began with a policy adopted in October and continued with work sessions beginning in March, according to the mayor’s office. The official summary does not provide a department-by-department appropriation table, so it does not offer a full breakdown of how the $1.7 billion is allocated.
What happens next
With the budget in effect, Sacramento will use the fiscal 2026-27 plan to direct funding across the listed service areas during the current budget year. The available city summary identifies the council’s adopted overall spending figure, the structural deficit and broad program priorities, but leaves the size of individual program appropriations and the homelessness-response reduction unspecified.