The budget preserves core services and invests in major projects, including over $1 billion in hotel investments
The Santa Monica City Council approved a $793.3 million biennial budget for fiscal year 2025-26 and $829.7 million for 2026-27, alongside the second year of the 2024-26 Capital Improvement Program, during its Tuesday meeting.
Facing declining revenues from international tourism, sales tax, hotel tax, and parking fees, compounded by legal liabilities and global economic uncertainty, the city implemented a hiring freeze for non-critical positions and reallocated existing funds.
Voter-approved Measure K funded enhancements, including a new police sergeant, a community services officer, security upgrades at public facilities, a mobile Advanced Provider Unit for homeless care, and an ambulance operator program within the Fire Department.
“This budget balances realism with optimism,” Mayor Lana Negrete said in a statement. “It recognizes financial challenges while making smart, focused decisions to keep Santa Monica moving forward.”
The budget preserves core services and invests in major projects, including over $1 billion in hotel investments, 7,721 new housing units, the Pier Bridge replacement starting in late 2025, and the reimagining of Santa Monica Airport. The city anticipates economic boosts from upcoming events like the FIFA World Cup, Super Bowl, and LA28 Olympics.
Finance Director Oscar Santiago emphasized disciplined financial planning, stating, “We’ve taken a responsible approach to close funding gaps, maintain core services, and invest in areas that best serve our residents.”
Additional measures include increased parking permit fees, expanded license plate recognition in downtown parking facilities, and new fines to deter municipal code violations. The budget also allocates $25,000 annually to the Early Childhood Task Force and begins repaying $47.2 million borrowed from the Housing Trust Fund.
The council also adopted resolutions to establish new job classifications, revise permit and parking fees, set the Gann appropriations limit at $3.27 billion, and allocate $2.4 million in state road repair funds. The FY 2026-27 budget will return for final adoption in May 2026, as required by the city charter.
