Santa Clarita City Manager Ken Striplin started Tuesday’s study session for the city’s 2025-26 budget with a caution that reflected the latest financial forecasts.
Striplin leads several such talks each year between January and June, when the final budget is presented to the City Council for its approval ahead of the start of the fiscal year July 1.
Based on the initial projections, Striplin said the city is taking a “wait-and-see” approach for its spending plan, with the current budget at $344.6 million, which represents a 0.7% increase over the previous year. The city’s general fund revenue, which is supported largely by local sales and property taxes, is projected to increase by 2.4% to $152.7 million.
“Soft” retail consumer spending is a potential source of concern for the city’s budget picture, as consumer spending, including car and truck sales, accounts for about 31% of the city’s general fund revenue, according to figures the city provided Tuesday.
That’s a contributing factor to the city projecting a 3.3% decrease in sales tax revenue.
“So, if you’ve been around for a few budget presentations, you know that I always end the presentations with a disclaimer,” Striplin said, referring to a warning he always gives that the figures could change, and probably will, a little.
“That doesn’t happen very often, or the numbers change very little,” Striplin said, referring to how the sessions normally go.
“Well, during the initial February budget study session, remember I spoke about the general consensus of a stable economy with the potential modest growth over the next year?” he said. “With the first quarter of this year complete, the economic landscape has changed. There has been extreme volatility in the markets,” he said, “and the current view of the economy can be described as clouded and uncertain. As a result, the directives and policies being implemented and constantly changed at the federal level, so much so that the UCLA Anderson Forecast announced a recession watch in March of this year.”
He added that although there are no signs of an imminent recession, if federal policies are fully enacted, a recession is “almost certain,” with JP Morgan’s forecast putting the probability at 60% within the next year.
“According to Kiplinger, consumers are becoming more cautious about spending, with concerns of a slowing economy, with the uncertainty about tariffs and the volatility in the stock market,” Striplin said.
While the economy’s predicted growth rate for the year is down a percentage point, Striplin assured the City Council members, commissioners and members of the public that Santa Clarita’s conservative spending plan should leave the city in good shape.
In terms of expenses in the city’s budget, public safety represents the biggest portion, approximately 23% or $35.1 million.
Earlier Striplin mentioned that, due to the uncertainty, there’s expected to be slightly fewer major capital projects in this year’s budget. The 2025-26 spending plan calls for $81.5 million, which is a 15% reduction from the previous year.
Among the expenses listed in the capital improvement budget: $34 million for Via Princessa Park; $17 million for the slurry seal program; $3.1 million for circulation improvements; and $2.5 million for renovations for SCVTV, the local public access television channel.
City officials also listed some of the more unique expenditures in the city’s spending plan, which includes: $130,000 in programming for the city’s first full year of operations for its Valencia community center and indoor pool; $200,625 for a Zamboni, which has a 12- to 18-month lead-in time, according to Striplin; and $50,000 for goat-grazing services, which are expected to be utilized for brush clearance in the Newhall Pass, according to Jerrid McKenna, director of neighborhood services.
The next step for the budget process is for a discussion at a Planning Commission meeting on May 20, followed by a City Council hearing for a proposed first reading on May 27. The city is scheduled to adopt its budget June 10.
