OC Cities Grapple with 2026–27 Budget Deficits
Multiple Orange County cities remain under active fiscal pressure ahead of the November 3 ballot, where Santa Ana's Measure N and Orange's sales-tax and hotel-tax measures will be decisive; Huntington Beach continues absorbing a 17% police raise against a projected decade-long deficit near $90 million, and Irvine is weighing a $27 million cut plan to close a projected $37 million structural gap by 2028.
City councils and finance staff in Huntington Beach, Fullerton, Orange, Santa Ana, Costa Mesa, Anaheim, and Irvine; police and employee unions; OC County government.
Five or more OC cities are managing structural budget deficits simultaneously, with labor cost increases, late budget adoptions, and November ballot measures as the primary drivers.
Orange County, California — spanning Huntington Beach, Fullerton, Orange, Santa Ana, Costa Mesa, Anaheim, and Irvine.
Fiscal pressures emerged in spring 2026; key votes occurred August–September 2026; the central inflection point is the November 3, 2026 ballot.
Rising public-safety labor costs, post-pandemic revenue normalization, one-time fiscal patches running dry, and voter-dependent revenue measures combine to produce multi-city structural shortfalls.
Five or more Orange County cities remain under active fiscal pressure as the November 3, 2026 ballot approaches. Huntington Beach is absorbing the full-year cost of a 17% police raise package ratified Sept. 1. Orange has begun contingency planning for a $27.6 million deficit. Santa Ana's sales-tax permanence measure is on the November ballot. Fullerton continues operating under a late, cut-heavy budget. Costa Mesa has approved new labor agreements projecting a shortfall beginning in fiscal 2027. Irvine is formally weighing a sweeping cut-and-revenue plan to close a projected $37 million structural deficit by July 2028.
On Sept. 1, 2026, the City Council voted 4-3 to ratify a three-year Police Officers Association contract: an 8% raise retroactive to July 1, 2026, followed by 4% and 5% increases in subsequent years (17% cumulative), costing an estimated $9.8 million through June 30, 2029. Voting yes: Andrew Gruel, Butch Twining, Gracey Van Der Mark, and Chad Williams. Voting no: Mayor Casey McKeon, Don Kennedy, and Pat Burns.
The city's Finance Commission found the deal could add $2.7 million to this year's deficit and approximately $7 million by 2035, with the projected structural deficit approaching $90 million within a decade. General-fund reserves sit just under $100 million — roughly 3.5 months of spending. City Treasurer Jason Schmitt has warned of a potential Chapter 9 bankruptcy scenario by 2030. Mayor McKeon called the approved deal unsustainable.
According to Voice of OC, the Orange City Council directed staff in mid-September to plan for the failure of its two November ballot measures: a 13-year 1% sales-tax measure and a 4% hotel-tax increase, which together would raise roughly $40 million over their combined terms. If voters reject them, the city projects a $27.6 million deficit, possible layoffs after labor agreements expire June 30, 2027, unfilled public-safety vacancies, potential changes to fire staffing and deployment, and cuts to permitting, parks, and infrastructure. Orange is also asking voters to make it a charter city.
Santa Ana voters will decide Nov. 3 whether to make the city's 1.5% Measure X sales tax permanent, preserving approximately $84 million a year and keeping the city's combined rate at 9.25% — tied for the highest in the county. The council placed it on the ballot 5-2. The OC Register editorial board urged a No vote, noting the city's unrestricted net position worsened from −$501 million in FY2018 to −$568 million in FY2025 despite years of Measure X revenue.
Fullerton is operating under a 2026–27 budget adopted 3-2 on Aug. 18 — more than six weeks past California's July 1 deadline. The plan closes an approximately $7 million gap by defunding 26 vacant positions (including 6 police officers and a fire marshal), cutting roughly $300k from library staffing, programs, and book budgets, reducing graffiti-removal funding by $150k, eliminating the New Year's Eve event, scaling July 4 to fireworks only, and reducing security at City Hall, community centers, and Hunt Library. An active recall effort and a prior multi-million-dollar accounting error on reserves provided the backdrop to the delayed adoption. A forensic audit remains an outstanding risk factor.
According to Voice of OC, Irvine's City Council voted 5-2 on Sept. 22 to continue studying City Manager Sean Joyce's "Target '28" plan — approximately $27 million in spending cuts combined with $10 million in new fee revenue, with no tax increases — as the city faces a projected $37 million structural deficit by July 2028. Separately, Voice of OC reported on Sept. 25 that Irvine is scrambling to curb its budget shortfall, with paid Great Park parking and credit-card fee pass-throughs among the options still on the table. The council had also quietly doubled members' personal discretionary budgets shortly before the deficit became public.
On Sept. 1, the Costa Mesa City Council unanimously approved two-year MOUs with police, police management, and city employees, adding approximately $6.8 million in pay and benefits and projecting a $2 million shortfall beginning in fiscal 2027.
Anaheim's proposed budget reflects roughly 8% spending growth including added fire and police resources, though its deficit is consuming an estimated half of the $120 million in new tax revenue projected for the year. A Voice of OC analysis from Sept. 17 noted Anaheim's general fund is up 85% since the 2015 budget, with its police budget up 84% over the same period.
The November 3 ballot is the central near-term inflection point: Santa Ana's Measure N and Orange's sales-tax and hotel-tax measures will significantly shape both cities' fiscal trajectories into 2027. Huntington Beach's next budget cycle will reflect the full-year cost of the police contract. Fullerton's forensic audit findings remain an outstanding risk factor. Irvine's council is expected to take further action on the Target '28 plan as the deficit horizon approaches.
- Jun 13, 00:13(4 months ago)
OC Register reports Irvine is considering paid parking at the Great Park and credit-card fee pass-throughs to close its budget gap.
- Jun 14, 23:18(4 months ago)
OC Register reports Fullerton's budget adoption is delayed pending the outcome of a forensic audit.
- Jun 16, 11:00(4 months ago)
Voice of OC reports Santa Ana officials plan to purge city commissions to help close a $13 million budget gap.
- Jun 17, 10:00(4 months ago)
Santa Ana City Council approves a balanced 2026–27 budget described as protecting services and continuing investment in public spaces.
- Jun 17, 13:00(4 months ago)
Voice of OC reports auditors have questioned whether Fullerton is properly overseeing its budget, underpinning the delayed adoption.
- Jun 18, 05:58(3 months ago)
Voice of OC reveals Irvine City Council quietly doubled members' personal discretionary budgets shortly before the deficit became public.
- Jun 21, 23:51(3 months ago)
OC Register reports Anaheim's proposed 2026–27 budget reflects approximately 8% spending growth, including added fire and police resources.
- Jun 24, 05:58(3 months ago)
Voice of OC covers Santa Ana's commission purge in the context of its bleak budget outlook.
- Jun 24, 11:00(3 months ago)
Voice of OC reports Anaheim's deficit is consuming roughly half of the $120 million in new tax revenue projected for 2026–27.
- Jun 24, 13:00(3 months ago)
Voice of OC reports Irvine is formally exploring paid Great Park parking and credit-card fee hikes to address its deficit.
- Jun 26, 05:58(3 months ago)
Voice of OC publishes a consolidated overview of OC cities' budget deficit challenges as the dominant civic story of the period.
- Aug 17, 17:00(about 1 month ago)
Fullerton City Council votes 3-2 to adopt its 2026–27 budget more than six weeks past the state's July 1 deadline. The plan cuts roughly $7M: 26 vacant positions defunded (including 6 police officers and a fire marshal), ~$300k from library budgets, $150k from graffiti removal, elimination of the NYE event, July 4 reduced to fireworks only, and reduced security at City Hall and community centers.
- Aug 18, 05:58(about 1 month ago)
Huntington Beach Council votes 4-3 to send a proposed 18% three-year police raise package to the finance commission for review before a September vote. City Treasurer Jason Schmitt warns the city could face Chapter 9 bankruptcy by 2030 under current projections; police account for ~30% of the general fund.
- Aug 31, 17:00(about 1 month ago)
Huntington Beach City Council votes 4-3 to approve a three-year POA contract: 8% retroactive to July 1, then 4% and 5% (17% cumulative total), costing an estimated $9.8M through June 30, 2029. Yes: Gruel, Twining, Van Der Mark, Williams; No: Mayor McKeon, Kennedy, Burns. The Finance Commission warned the deal could add $2.7M to this year's deficit and $7M by 2035, with the projected deficit approaching $90M within a decade against reserves of just under $100M (~3.5 months of general-fund spending).
- Sep 1, 20:00(29 days ago)
Costa Mesa council unanimously approves two-year MOUs with police, police management and city employees worth about $6.8 million in added pay and benefits, with a $2 million shortfall forecast from fiscal 2027.
- Sep 7, 06:00(24 days ago)
OC Register editorial board opposes Santa Ana Measure N, which would make the 1.5% Measure X sales tax permanent (about $84 million a year); the council put it on the Nov. 3 ballot 5-2.
- Sep 14, 05:58(17 days ago)
Orange directs staff to plan for a $27.6 million deficit and possible layoffs if voters reject its 1% sales-tax and 4% hotel-tax measures on Nov. 3.
- Sep 21, 17:00(9 days ago)
Irvine City Council votes 5-2 to keep studying City Manager Sean Joyce's Target '28 plan — roughly $27 million in cuts and $10 million in new fee revenue, no tax increases — against a projected $37 million structural deficit by July 2028.
- Sep 25, 10:00(5 days ago)
Voice of OC reports Irvine is scrambling to curb its budget shortfall, with paid Great Park parking and credit-card fee pass-throughs still among options under consideration.
- NEW5 days ago
Irvine City Council during a meeting on May 13, 2025. Credit: BRIAN GUEVARA, Voice of OC. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/06/Irvine-City-Council-Guevara-2025-23.jpg?fit=771%2C434&ssl=1" /> City leaders are grappling with how to decrease spending and increas
- NEW14 days ago
A police officer walking towards the police line amnd the area of the crime scene. (Omar Sanchez / Voice of OC) " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/09/03.31.2021-Omar-Sanchez-3.jpg?fit=771%2C434&ssl=1" /> Many cities are struggling with how they can give pay ra
- NEW17 days ago
A man starts conversation with others at the fountain in the Orange circle in Orange, Calif., on April 16, 2026. Credit: Nora Grube, VOICE OF OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/05/CivicPictures_2026_April_Grube-7-scaled.jpg?fit=771%2C514&ssl=1" /> Orange of
- NEW21 days ago
The police stand on the sides at the City Council meeting in Costa Mesa, Calif., on July 15, 2025. Credit: JOSIAH MENDOZA. Voice of OC. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/09/COSTAMESA-CC-MENDOZA-54-1-copy.jpg?fit=771%2C434&ssl=1" /> City officials signed off l
- NEW28 days ago
The contract approved by a split City Council would increase payroll costs by $9.8 million for the raises over the next three years.
- NEW28 days ago
Huntington Beach Pier. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/06/HuntingtonBeach-2026-Randazzo-3118.jpg?fit=771%2C514&ssl=1" /> Surf City police officers will receive an 18% raise over the next three years despite concerns from the mayor and city treasurer on what
- NEW29 days ago
A Huntington Beach Police motorcycle parked at the Huntington Beach Civic Center on Sept. 17, 2024. Credit: ERIKA TAYLOR, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2024/09/Taylor_HuntingtonBeachCityCouncil_Sept2024_3.jpg?fit=771%2C434&ssl=1" /> City leaders ar
- NEWabout 1 month ago
While county unions generally receive raises from county supervisors, this year they’re facing more limited raises amid a shrinking work force and a 25% raise for supervisors. Voice of OC is Orange County's nonprofit newsroom. We rely on donations from people like you to sustain our news agency. Ple
- NEWabout 1 month ago
Huntington Beach police officers during a training on July 21, 2021. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/08/AP_9231-1-copy.jpg?fit=771%2C433&ssl=1" /> City council members asked for more studies on whether they could afford the raise, leaving officers without a
- NEWabout 1 month ago
A view down N. Harbor Blvd. towards Downtown Fullerton on Oct. 5, 2025. Credit: ERIKA TAYLOR, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2025/10/Taylor_DowntownFullerton_Oct2025_-20.jpg?fit=771%2C434&ssl=1" /> Officials slashed millions in spending on a score o
- NEWabout 1 month ago
Fullerton City Hall. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/04/CityHall_Fullerton_2023_April_Cho2-scaled.jpg?fit=771%2C434&ssl=1" /> The city is facing serious problems with their budget, with plans to balance it for this year but no answers on what the future hol
- NEW3 months ago
People line up to give public comment during the Tuesday, June 23, 2026, OC Board of Supervisors meeting. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/06/148A0066.jpg?fit=771%2C514&ssl=1" /> Orange County’s three largest cities are grappling with budget deficits while c
- NEW3 months ago
A worker maintains the Great Park in Irvine, Calif., on Feb. 25, 2025. Credit: JOSIAH MENDOZA, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2025/02/GREATPARK-IRVINE-2025-MENDOZA-3.jpg?fit=771%2C434&ssl=1" /> The council is also expected to hold a budget deep dive
- NEW3 months ago
The dais at the Anaheim City Council meeting on Jan. 13, 2025. Credit: ERIKA TAYLOR, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/01/CityCouncil_Anaheim_Jan13_2026_Taylor-23.jpg?fit=771%2C434&ssl=1" /> When the 1997 Disneyland Resort expansion bonds are paid
- NEW3 months ago
Kids play at Gerardo Park on Dec. 11, 2024, in Santa Ana. Credit: DYLAN NICHOLS, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2024/12/GerardoPark_santaAna_2024_nichols21.jpg?fit=771%2C514&ssl=1" /> Officials are dissolving five resident-run advisory boards to sav
- NEW3 months agoOC Register: Anaheim plans 8% growth in 2026-27 budget, with more fire and police resources included
Councilmembers plan to consider approving the proposed budget for the upcoming fiscal year on Tuesday, June 23.
- NEW3 months ago
Irvine City Council listens to a public comment during the meeting on May 13, 2025. Credit: BRIAN GUEVARA, Voice of OC. " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/06/Irvine-City-Council-Guevara-2025-15-1.jpg?fit=771%2C434&ssl=1" /> Council members ratcheted up their p
- NEW4 months ago
A view of Downtown Fullerton on Oct. 5, 2025. Credit: ERIKA TAYLOR, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2025/10/Taylor_DowntownFullerton_Oct2025_-18.jpg?fit=771%2C434&ssl=1" /> Auditors are recommending Fullerton hire an experienced chief financial offic
- NEW4 months ago
SANTA ANA, Calif. – The Santa Ana City Council unanimously approved a balanced budget for the 2026-27 fiscal year on Tuesday, June 16, 2026, that protects essential City services while continuing to invest in neighborhood improvements, parks, streets, youth, arts and public safety. The City’s genera
- NEW4 months ago
Downtown Santa Ana on Sunday, April 19, 2026. Credit: SYDNEY SAWYERS, Voice of OC " data-large-file="https://i0.wp.com/voiceofoc.org/wp-content/uploads/2026/06/GroupProject_SantaAna_2026_Sawyers-4.jpg?fit=771%2C434&ssl=1" /> Santa Ana City Council members are poised to dissolve five city commissions
- NEW4 months ago
A presentation on the audit will be provided at the upcoming June 16 city council meeting.
- NEW4 months ago
Though flush with ideas on how to solve their budget problem, councilmembers aren’t always on the same page.
- NEWSVoice of OC: Irvine Scrambles to Curb Budget Shortfall
- NEWSVoice of OC: Is Orange County Running out of Cash for Cops?
- NEWSVoice of OC: Orange Explores What to do if Sales Tax Proposal Fails in November
- NEWSVoice of OC: Costa Mesa Bumps Pay for Police and Staff
- NEWSOC Register: Huntington Beach approves 17% raise for police amid budget concerns
- NEWSVoice of OC: Huntington Beach Approves Police Raises Amid Budget Deficit Projections
- NEWSVoice of OC: Can Huntington Beach Afford Raises for Police Officers?
- NEWSVoice of OC: Orange County’s Cold War on Labor: Frozen Vacancies and Limited Raises
- NEWSVoice of OC: Huntington Beach Pumps Brakes on Raises for Police Amid Budget Concerns
- NEWSVoice of OC: Fullerton Defunds Vacant Positions, Library Services & More to Balance Late Budget
- NEWSVoice of OC: Fullerton Looks to Adopt New Budget a Month Late With Millions in Cuts
- NEWSVoice of OC: OC’s Biggest Civic Headlines as Cities Grapple With Budget Deficits
- NEWSVoice of OC: Irvine Looks to Charge For Parking at Great Park in Face of Budget Deficit
- NEWSVoice of OC: Anaheim’s Budget Deficit Eats Half of $120 Million in Expected New Tax Revenue
- NEWSVoice of OC: Santa Ana’s Bleak Budget Leads to Commission Purge
- NEWSOC Register: Anaheim plans 8% growth in 2026-27 budget, with more fire and police resources included
- NEWSVoice of OC: Irvine City Council Quietly Doubles Their Personal Budgets Ahead of Deficit
- NEWSVoice of OC: Auditors Question if Fullerton is Properly Overseeing Budget
- NEWSSanta Ana: Santa Ana City Council approves balanced 2026-27 budget that protects services, continues investments in public spaces
- NEWSVoice of OC: Santa Ana Officials to Purge City Commissions to Curb $13 Million Budget Gap
- NEWSOC Register: Fullerton city budget delayed, pending results of forensic audit
- NEWSOC Register: Credit card fee hikes, paid parking at Great Park are among ideas to solve Irvine’s budget problem