Riverside approves $1.57 billion budget into a $34 million deficit, with no new tax to fill it

The Riverside City Council approved a $1.57 billion biennial budget Tuesday night on a 6-1 vote, covering a spending plan of roughly $1.57 billion in the coming fiscal year and $1.59 billion the year after, operating and capital combined.

The numbers underneath are tighter than the totals suggest. The city projects general-fund deficits of $27.1 million in fiscal 2026-27 and $34 million in 2027-28 against its prior forecasts, driven by slowing property, sales, and utility-users' tax revenue and rising personnel and pension costs. To close the gap, staff recommended holding roughly 38 positions vacant, trimming public-works spending, raising user fees across a range of city services, and using one-time surplus money — reductions the city pegged at about $17.95 million in the first year and $22.27 million in the second.

What sharpens the picture is what didn't happen in June. Riverside voters rejected Measure Z, a proposed quarter-cent sales-tax increase that would have lifted the rate from 1% to 1.25% and funded a fire-department overhaul. Nearly 59% voted no. That measure would have brought in an estimated $20 million a year — money the city will now budget without, even as the fire-staffing needs that prompted it remain on the table.

For operators, the read is in the mechanics, not the headline number. A city covering a structural gap through vacant positions and deferred public works is signaling slower permit and inspection turnaround, thinner infrastructure maintenance, and a fee schedule that climbs. The higher user fees land directly on businesses that pull permits, hold licenses, or draw on city services. And the revenue story — softening sales and property tax in the IE's largest city — is the kind of municipal signal worth watching across the corridor, where the same tax bases are flattening at once.

The deficit figures are measured against prior-cycle forecasts, not a hole in the adopted budget, which is balanced. But the structural pressure is real, and with the tax measure dead, the city's options narrow to the ones already in the budget: hold the line on hiring, spend less on what residents and businesses see, and charge more for what the city does.