Santa Monica City Council adopts 2025-27 biennial budget focused on financial resiliency and community priorities

June 27, 2025 10:35 AM

SANTA MONICA, Calif. (June 26, 2025) – The Santa Monica City Council adopted the FY 2025-27 Operating Biennial Budget and the second year of the FY 2024-26 Capital Improvement Program Budget at its meeting Tuesday night.

The total adopted Biennial Budget is $793.3 million in FY 2025-26 and $829.7 million in FY 2026-27. The budget reflects the city’s continued efforts to remain financially resilient in the face of serious fiscal constraints with a focus on three strategic priorities:

This budget preserves valued city programs and services while also focusing efforts on economic development and events, the development of affordable housing, and expanding the city’s response to keep Santa Monica’s neighborhoods and streets safe. These strategic investments were made possible through a combination of the voter passed initiative Measure K as well as a reallocation of existing budgets and the implementation of a hiring freeze that will focus on filling only the most critical staff positions.

While the city’s immediate financial situation poses challenges, there is considerable opportunity in the coming years with major events, such as the FIFA World Cup, Superbowl and LA28 Olympics all coming to the Los Angeles region. There is over $1 billion in investment in our local hotels and 7,721 units of new housing pending, approved or under construction. The new Pier Bridge project will begin at the end of 2025 and the reimagining of the Santa Monica Airport is well underway.

However, a downturn in international tourism, regional challenges, and greater economic uncertainty are impacting key revenues that the city relies on for its operations, including sales tax, transient occupancy tax, or hotel tax) and parking fees. The challenges are compounded by unprecedented legal liabilities, tariffs and global instability, and funding uncertainty from shifts in federal government policies.

In response to the ongoing fiscal pressures, the budget carefully manages limited resources through disciplined financial planning, reduces reliance on reserves and maintains essential services while focusing on key community priorities.

“This budget reflects careful planning and tough but necessary choices,” Finance Director Oscar Santiago said. “We’ve taken a responsible and strategic approach to close funding gaps, maintain core services and invest in areas that best serve our residents.”

While finances remain constrained, the adopted budget does include several key enhancements funded by voter-approved Measure K:

Looking ahead, Santa Monica is poised for continued recovery with major investments underway in hotels, housing, the Pier and beach areas, and the reimagining of the Santa Monica Airport. While the road ahead will require ongoing discipline and adaptability, the adopted budget lays the groundwork for a sustainable and vibrant future.

“This budget balances realism with optimism,” Mayor Lana Negrete said. “It recognizes the financial challenges we face while making smart, focused decisions that keep Santa Monica moving forward. We’ve prioritized essential services, invested in long-term needs and taken steps to strengthen our city’s foundation for today and the future.”

As required by the City Charter, the FY 2026-27 operating budget plan will return for formal adoption in May 2026.

For more information, see the staff report, view the council discussion or visit santamonica.gov/santa-monica-budget.

Media Contact

Tati Simonian
Public Information Officer
Tati.Simonian@santamonica.gov

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