David Schmalz here. It wasn’t until I started working as a reporter that I ever thought much about municipal budgets. I guess that makes me a normal person. And normally this time of year is when budgets are in the rear view, something to revisit when new numbers come in.
But not in the City of Monterey, where, how to address the city’s structural $10 million deficit is the top priority.
When the Monterey City Council met on Aug. 27, the council was asked to review a set of index cards with strategies that would raise revenues and/or reduce ongoing expenses, and then rate that option. At the Sept. 2 council meeting, the councilmembers shared their individual results, and just two strategies had unanimous appeal: increasing the sales tax by 0.375 percent, which would generate a projected $4.5 million annually, and “optimizing” revenue from the campground operations at Veterans Park, bringing in an additional $125,000 in revenue.
But even with those two things—should Monterey voters pass a sales tax increase next spring or fall—the city is still facing down a structural deficit of $5.375 million.
When Monterey City Council met last night, Sept. 16, one of things discussed was the effort, which is just now beginning, of gauging public opinion regarding their appetite for a sales tax and/or renewing other taxes set to sunset, as well as quality-of-life questions.
The firm retained by the city, FM3, will be conducting the outreach via multiple channels—text, calls—to recent voters in the city over this fall, and then will do another round of outreach following the spring 2026 election. There are other taxes the city could explore—vacancy, admissions, even streaming—but none have unanimous council support.
So what to do? Where is the money going to come or be cut from? The hard choices remain ahead, and for Monterey residents, the meeting to mark on your calendar is Oct. 21, when the council will be asked to figure it out.
One of the index cards had the simplest solution of all: reappropriate Neighborhood and Community Improvement Program funds to the general fund, which would reduce the structural deficit by up to $6 million. Will that sacred cow finally get sacrificed to an effort to stabilize the city’s finances?
Something has to give, and I’ll be curious to see how it all plays out.