City Council adopts fiscal year 2026-27 budget

City Council adopts fiscal year 2026-27 budget

Published on June 29, 2026

At its June 23 meeting, the City Council adopted the budget for fiscal year 2026-27, establishing the City's financial plan for the upcoming year. The adopted budget is balanced without drawing on General Fund reserves.

The adopted budget also reflects a significant development regarding the City's ongoing Vehicle License Fee (VLF) revenue issue. Pending the Governor's signature, the State is projected to provide a $1.9 million backfill, representing approximately 65% of the City's fiscal year 2024-25 VLF revenue shortfall. While this funding is an important step toward restoring lost revenues, it does not fully address the City's VLF losses. The City will continue working with the County to pursue both legislative and legal remedies to recover the remaining VLF revenue owed by the State.

Although the fiscal year 2026-27 budget is balanced without the use of reserves, the City continues to face a structural deficit, with ongoing expenditures projected to outpace ongoing revenues in future years. To address this long-term challenge, staff will return to the City Council in fall 2026 with revenue enhancement options and additional strategies to improve the City's long-term fiscal sustainability.

The adopted budget will be made available at menlopark.gov/budget.

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