From the Mayor's Desk: March 13, 2026

From public safety initiatives to essential infrastructure projects, the City of Cerritos is committed to achieving high-quality services through prudent budget analysis and implementation. During our meeting on Monday, the City Council took an important first step in shaping our Fiscal 2026-2027 budget. 

The meeting included a staff presentation on our current fiscal climate, including 10-year forecasts on City expenses, revenues, and reserve balance. Data shows that expenditures are projected to outpace revenues over this period, resulting in recurring structural deficits. Furthermore, General Fund reserves are declining steadily and limiting the City’s flexibility to fund capital improvements, address infrastructure needs, and maintain current levels of service. The picture was clear: absent meaningful changes, long-term financial pressures are expected to intensify. Following the presentation, the City Council directed staff on several budget initiatives. 

The first initiative is an assessment of a potential 1% Transactions and Use (TUT) tax. A TUT is more commonly referred to as a local sales tax. It applies to taxable retail transactions for some goods and services occurring within the City and to certain purchases allocated through the countywide use tax pool. Adoption would require voter approval. Estimates prepared by the City’s sales tax consultant, HdL Companies, projects that a 1% TUT would generate approximately $19 million annually for the City. More than half of the potential revenues from a TUT would be generated by non-residents who visit and shop in Cerritos.

In addition, the City Council directed the development of a dual budget planning framework for the upcoming Fiscal Year 2026-2027 Budget. A dual budget framework would allow the City Council to consider adoption of either: a primary budget scenario assuming more revenue and greater service capabilities, or a contingent budget scenario assuming less revenue and limited financial flexibility. 

In addition, the City Council has authorized the City Manager to establish a Resident Budget Task Force to provide community input on the City's current budget situation and potential budget balancing strategies. 

As these initiatives unfold, all community members are invited to participate in a series of budget meetings. Community budget workshops are planned for April 15 and April 21, and the City Council will hold its two remaining budget study sessions on May 11 and June 8, respectively. A public hearing and budget adoption is scheduled for June 22, with the 2026-2027 Fiscal Year beginning on July 1. 
I encourage you to attend a budget meeting, where you’ll learn about our current fiscal climate, financial forecasts, budget considerations, and have opportunities to share feedback. Learn more at cerritos.gov/future.