Each year, the city of Sacramento creates a budget to plan how it will spend millions of taxpayer dollars on everyday services.
The budget lays out city spending plans for everything from police staffing to homeless services to park projects. It also estimates how much revenue the city will receive for the financial year, which starts July 1 and ends June 30.
Sacramento will hold public hearings on a proposed budget between May and June, inviting residents to give feedback before the City Council approves a several-hundred page document.
But this time isn’t the only opportunity for residents to give input on how the city invests their money. Residents can talk to their elected representatives about their opinions on budget priorities any time of the year, said assistant city manager Leyne Milstein. The city’s participatory budgeting pilot program has also allowed hundreds of people to get directly involved.
Bruce Lee is president of the Sacramento Taxpayers Association, which aims to empower residents to hold their governments accountable. He said everyone has a vested interest in the city budget.
“It is the guts of how we’re spending our resources [and] how we’re spending our taxpayer money,” Lee said. “And taxpayers have a responsibility for our government.”
Here are answers to questions about the city’s budget, including where the city gets the money for its budget, the process of creating it and how Sacramento has tried out participatory budgeting.
What does the Sacramento city budget cover?
The budget covers estimated revenues and expenses for the entire city. It serves as a plan for how the city will pay for its services and programs for a fiscal year running from July 1 to June 30.
Services the city provides include police, fire, street maintenance, water, sewer, garbage collection, parks and animal care. The budget also includes plans for paying off debt, such as payments on bonds used to build the Golden 1 Center.
Employee salaries and benefits are accounted for in the budget, too. About 5,000 full-time employees work for the city as of the 2022-23 fiscal year.
The city budget is separate from the budget of the Sacramento City Unified School District. They are not tied together.
How does the city divide its spending?
One way to look at how the city allocates resources is by examining how it spends its General and Measure U Funds. The General Fund is the city’s main funding source and customarily doesn’t have spending restrictions. The Measure U Fund, which comes from the city’s one-cent sales tax, can be used for general government purposes. In the approved 2022-23 budget, these funds made up $742 million of the $1.45 billion total.
Of the $742 million, the department with the most approved spending was police with $224 million or 30%. The fire department had the second-highest with $173 million or 23%. Together, the public safety departments made up just over half of the approved General and Measure U Funds spending.
The city earmarked 13% of the funds — or $96 million — for citywide and community support, which includes employee benefits, insurance and election costs. For comparison, the Community Development Department and the Youth, Parks and Community Enrichment Department each account for about 6% of the funds.
Another way to examine city spending is looking at the entire budget, which draws from many funds with different usage restrictions. Employee services accounted for 49% or $710 million of the approved $1.45 billion budget for 2022-23. Services and supplies made up the next-largest chunk at 23% or $333 million.
The Capital Improvement Program — which plans for funding to build or repair city streets, storm drains, parks and community centers — made up 9% or $130 million of the entire budget.
Who makes and approves the budget?
The budget division of the city’s finance department is responsible for forecasting revenues and expenditures for the budget. But staff from all city departments help with planning the budget, assistant city manager Leyne Milstein said, because they are experts on their own operations, costs and specific funding.
Generally, department staff can request changes to their upcoming budget compared to the one approved the previous year. The city manager’s office considers those requests.
Sacramento’s city manager, currently Howard Chan, proposes the annual budget documents. Section 111 of the city charter requires the city manager to present the proposal to the City Council by May 1 every year.
The council reviews the documents, holds public hearings and gives direction on any changes to the proposal. The law-making body, which consists of a mayor and eight council members, is also responsible for voting to approve and adopt a budget each year.
Where does the city get its money from?
The city gets its funding from a variety of sources including: taxes, charges, fees and services, state and federal government agencies, licenses and permits, fines, and interest. For the approved 2022-23 budget, taxes made up 46% or $667 million of the $1.45 billion.
Taxes are also the largest revenue source for the General and Measure U Funds. Which taxes generate the most money can depend on the economy, Milstein said.
Currently, property taxes generate the most revenue, followed by sales taxes, business operations taxes and utilities users tax, Milstein said. A small portion of transient occupancy or hotel taxes goes to the General Fund, but the rest goes to a separate fund with specific spending rules.
How has COVID-19 relief affected the budget?
The city received more than $200 million in one-time federal funding between April 2020 and June 2022 because of the COVID-19 pandemic.
Sacramento got $89.6 million from the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and $112.2 million from the American Rescue Plan Act (ARPA). Federal law required the city to spend CARES money by the end of 2021, but Sacramento has until the end of 2026 to use all the ARPA funds.
The city reports how it has spent ARPA funds on an interactive online hub. The COVID-19 relief funding has allowed the city to make up for lost revenue and contribute to programs such as food justice grants, guaranteed income and affordable housing projects.
“Unfortunately, though, we won't have the resources to continue some of the programming that was funded with that one-time money,” Milstein said. “Because it was just such a substantial amount of money all at one time.”
But once cities run out of special funding, sometimes people still expect new programs to continue, said W. Bruce Lee with the Sacramento Taxpayers Association. The expectations can put pressure on the budget.
“We need to be careful using one time money for long-term expenses,” Lee said. “Once you create a new program, it's sometimes hard to get rid of it.”
What’s the timeline for creating a budget each year?
The city doesn’t only work on the budget from May to June. Budget discussions happen year-round. Here’s a snapshot of the process, based on city documents.
- A new fiscal year begins July 1 with the approved budget serving as a plan for how to spend city money.
- The city plans and identifies issues it might consider for future budgets.
- Staff report to the City Council on major financial issues, review budget goals and do paperwork for the end of the last fiscal year. The city also sets budget goals and considers minor adjustments to the budget.
- Halfway through the fiscal year, the city manager’s office meets with departments to discuss any budget issues at this mid-year point.
- Staff give the council reports on how the previous fiscal year ended and any major issues for the upcoming budget.
- City staff develop a budget proposal for the upcoming year based on the current budget and any changes. The city manager’s office meets with departments to discuss any requests.
- The City Council holds public hearings on the proposed budget. The council approves a budget by June 30.
How can people give feedback on the budget?
When the council or its Budget and Audit Committee hold hearings to discuss the budget, people can give their input through public comment. Meeting agendas and staff reports are posted online.
Public comments can be spoken or written. Spoken comments have a two-minute time limit and are given in council chambers or remotely via Zoom.
Meetings are live streamed, recorded and posted online, so anyone can replay video of people giving public comments. The city doesn’t offer a voicemail option, so those wanting to speak must do so live.
Written comments can be submitted to the eComment system on the city website. Those comments are sent to the council, become part of the official record of the meeting and are viewable online.
Lee recommends people prioritize their points in a spoken comment and submit any additional thoughts in a written comment.
But outside of public hearings, residents can tell their council member or the mayor their opinions about the budget any time of the year. CapRadio has resources on how to connect with your representatives and find out who they are and whether or not you live in a deferred voting area.
What is participatory budgeting in Sacramento?
Sacramento is close to finishing a participatory budgeting pilot program, which aims to empower residents by allowing them to decide how to spend taxpayer dollars in their communities. Oakland, San Francisco and Vallejo are among the cities that began a participatory budgeting program before Sacramento.
The Measure U Community Advisory Committee, which reviews spending of that tax, proposed the pilot in 2020 and a starting amount of $15 million. The council ultimately approved $1 million for the pilot, which launched its first phase in April 2022.
Measure U Commissioner Debra Oto-Kent, who is also the founder and executive director of the Health Education Council, has worked on the pilot and its playbook. A committee decided to split the $1 million between neighborhoods in north and south Sacramento because demographic data showed inequities there, Oto-Kent said. The city historically hasn’t invested in these areas compared to other parts of Sacramento.
Through the pilot, the committee aimed to involve communities that are typically excluded from the budget process, such as youth. Residents submitted project ideas and voted for their preferences on how to spend the $1 million.
“It was a stated intent to try to increase awareness, understanding, outreach and engagement to residents who traditionally don't engage in providing input into the city budget,” Oto-Kent said. “Or routinely call in to City Council meetings or necessarily belong to established advocacy groups that weigh in formally on various aspects of local government budgets.”
As of April 2023, the city still needs to distribute funding for the winning project proposals to the community-based organizations that applied to carry them out. Selected projects include mentoring programs for northeast Sacramento youth, neighborhood cleanup grants, a career academy and a transportation van for unhoused youth in Oak Park.
Any future projects will depend on if the council approves more funding. Updates on participatory budgeting can be found on the city’s website.
What budget tips do watchdogs recommend?
When reviewing a budget proposal for the upcoming year, Lee with the Sacramento Taxpayers Association recommends comparing it to the current budget. He also suggests keeping in mind that the budget is not just a once-a-year process.
Developing a specialty on a certain area of the budget is also more practical than trying to be an expert on everything, Lee said. Especially when it comes to looking at historical percentages and rates of growth and decline.
If people have an interest in certain topics, Oto-Kent recommended getting to know organizations focusing on the subjects. For example, The People’s Budget Sacramento has called on the city to reduce law enforcement spending and instead invest more money in housing and youth services.
Outside of the budget public hearings from May to June, Oto-Kent encourages people to reach out to their city elected officials. Anyone who sees something that can be improved and informally talks about issues with community members can give suggestions on how the city spends money.
“There is power in two or three people talking with their neighbor, calling their council members, sharing their story and bringing the narrative to some of these established committees and their council members about the impact of what is needed in their communities,” Oto-Kent said. “To me, that is aligned with the budget process in a way.”
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