The Abridged version:
- Woodland is facing a $4.6 million deficit in the next fiscal year, a number that staff predicts will continue growing year after year.
- To help remedy the situation, the city council gave its OK to a plan that would bring a 1 cent sales tax increase to the ballot in November.
- The council also directed staff to come up with options for around $460,000 worth of reductions for this fiscal year.
As bleak financial predictions continue across Yolo County, the Woodland City Council is revisiting a proposed sales tax increase that leaders hope helps the city overcome its ongoing budget deficit.
At a special meeting on Tuesday, the council endorsed a staff plan to bring the increase to voters in November.
“We have to keep this ship afloat and I don’t think we can afford to just sit here and nod our heads and go ‘business as usual,’” said Mayor Tom Stallard during a special budget meeting.
In a presentation to council, city staff predicted that Woodland’s deficit going into the 2026-2027 fiscal year would be roughly $4.6 million. By 2030-2031, that number could rise to nearly $7 million if the council takes no action.
“That’s a big number for us, relative to what we’re doing here,” Stallard said.
While reserves can help make up the gap this year, staff said the city can’t rely on those funds moving forward.
“It’s not intended to be money we live off on in an ongoing situation,” finance director Kim McKinney said.
As a result, the council is going to have to start thinking about other, more sustainable ways to raise funds and cut costs. That will likely include asking voters to approve a cent-on-the-dollar increase in sales tax in November, as well as potential cuts down the line.
“We have some work to do,” McKinney said.
Lagging sales tax
The structural deficit in the city’s general fund is the result of escalating costs, including personnel, utilities and insurance. It is also contending with flatlining sales tax revenue and a slowdown in new development.
In addition to that, Woodland has a lower sales tax rate than all three other incorporated cities in Yolo County. Woodland’s rate is 8%, while Davis and West Sacramento sit at 9.25% and Winters sits at 8.25%.
The city tried to remedy that in 2024 with Measure U, which proposed a 1 cent sales tax increase that promised to generate $16.5 million each year for eight years. But voters rejected the measure by roughly 1,500 votes, leaving the city’s current rate in place.
At the time, mailers and ads opposing the measure were funded by a group called the Yolo County Business PAC. Many of the rebuttal arguments against it cited the increasing cost of living in Woodland and the added expense for residents.
Despite the defeat, the City Council endorsed a plan Tuesday night to bring another 1 cent sales tax increase back to the ballot this November.
“Does the community want to step up and say, ‘OK, we all benefit when we wall put a little in,’” Stallard said. “Our other neighboring communities all did it last year. We didn’t, but we have to do it.”
“If you like what we have, you’ve got to give us the resources to continue it and grow it,” he said.
Potential cuts
In addition to the potential increase in revenue, the council discussed the need to start planning for cuts.
Staff said that if major changes to the city’s financial situation don’t happen by next February, members will have to make some difficult decisions.
“The longer we wait, the harder those decisions are going to be,” city manager Ken Hiatt said.
In response, the council directed staff to come up with options for a 10% reduction in this year’s deficit, or about $460,000.
“At this point, nothing that gets cut out of the budget doesn’t get felt,” Hiatt said.
While no decisions about specific cuts were made, members expressed a desire to maintain as many of the city’s library, family and recreation programs as possible.
“To me those are essential services,” Mayor Pro-Tem Mayra Vega said.
“This won’t be Woodland if we let those things go,” Stallard said.
The city’s next budget discussion will happen on May 19 and the presentation of the proposed budget for 2026-2027 will happen on June 2.
Daniel Hennessy joins Abridged from the California Local News Fellowship. He’s a reporter covering Yolo County.