The $961 million budget proposal is $10 million more than last year.
The increase would pay for new employees and would help the city approach its goal of a 10-percent reserve.
City Manager John Shirey says the city is in good shape financially, but still forecasts a deficit by 2018.
"We still have increased pension obligations to meet. We need to invest more in infrastructure," Shirey says. "But this budget has healthy increases in both property taxes and sales taxes to offset at least some of those increasing costs."
Sales-tax revenues in the last 12 months increased by 5 percent compared to the previous year.
The budget includes an additional $2 million for after-school and preschool programs, and $4.5 million to replace fire stations in south Sacramento and Natomas.
There would also be money to pay for more code enforcement officers to monitor water use, a project manager for the Riverfront District, and more gang-prevention programs.
People will have through June to comment on the budget items, before the city council votes.
Shirey proposed the budget, and says it lacks funding in one important area.
"One of the regrets I have about this budget is that we don't have a larger capital improvement program budget.," he says. "These are monies that we spend to fix hardware, roads, streets, bridges, curbs, sidewalks but also community buildings."
The proposal is based on council recommendations.