From the Mayor's Desk: June 12, 2026

Throughout our current budget process, the City has been intentional about discussing the status of our fiscal climate and has encouraged our community to join in the conversation. We are now entering the final stages of developing our Fiscal Year 2026-2027 Budget, with the third and final budget study session conducted on June 8 during the City Council meeting. Up next is a public hearing and budget adoption at our June 22 meeting.

This has been an especially challenging budget planning period, given current economic conditions, stagnant projected sales tax revenues, and the pending conclusion of Successor Agency payments to the City that will discontinue millions of dollars in annual revenue. Simply put, if there are no service adjustments and/or new revenue, City expenditures will continue to outpace revenues over the next several years.

During Monday’s meeting, the City Council chose not to proceed with the dual budget framework that was first presented as an option in March. This action removes the budget scenario that was projected to bring in millions in new annual revenue through a voter-approved Transactions and Use Tax (TUT). While the new revenue is desirable, it was not the will of the City Council at this time to place such a tax measure on a future ballot for voter consideration. Where that leaves us is with a single budget scenario, which assumes no new revenue and includes significant expenditure and service reductions to maintain fiscal sustainability. The expenditure reductions on their own won’t balance the budget, which will require the City to pull from its reserve fund to cover the overall deficit.

Some of those expenditure reductions are now coming into focus. Staff projections show that a limited hiring freeze will result in cost savings of about $1.7 million. At the Cerritos Center for the Performing Arts, a 20% reduction in non-Arts Education-related programming, staffing, and marketing initiatives will save approximately $700,000. Another $3.7 million in public infrastructure, maintenance, and landscaping is projected to be suspended or reduced. Additionally, we will be instituting one-day closures per week or adjustments in operating hours at our Community Centers. These changes, plus others, help us get to a more manageable final budget while maintaining critical services and valued programs and events. I am mindful that these budget initiatives are one-year plans, and that the City must continue to explore additional expenditure reductions and revenue options to improve our fiscal climate.

I want to again thank our community for their involvement during this budget period. Whether you were involved in the Resident Budget Task Force, attended one of our Community Budget Workshops, or have been regularly following our City Council discussions, thank you for your engagement. Your thoughtful feedback made clear your love for the City, the value you hold for our services, and hopes for the future. The task before the City Council is to adopt a budget that is representative of our community’s best interests and reflects the current fiscal climate and the projected conditions. I look forward to continuing our discussion and working alongside my City Council colleagues during our public hearing and budget adoption meeting on June 22.

For the latest updates on the City's budget process, including recent budget news, agenda reports and presentations, and FAQs, visit cerritos.gov/future.