Palm Springs expects to have a $12.8 million general fund deficit at the end of the fiscal year that starts July 1 but should have an $8.3 surplus again beginning in July 2025, according to budgets passed unanimously Thursday evening.
Driving the news: At its regular meeting, the Palm Springs City Council unanimously approved multiple budgets — including those for the general fund, airport, and capital improvement projects — for the next two years. The budgets needed to be adopted before the start of the new fiscal year on Saturday.
Zoom in: Staff presented a general fund budget showing the city expects to pull in $197.5 million in revenue in the next year — $11 million more than during the 2022-23 budget — and spend $210 million. That’s roughly $30 million more than it spent in the previous year. In the fiscal year starting July 1, 2024, it’s predicted that the city will see $191.8 in revenue and spend $183.5 million.
- More than $19 million in grant funds coming in and going out will impact next year’s budget, as will expenses related to hiring additional city employees and a $4.4 million increase in the Parks and Recreation Department’s budget. The police and fire departments will also see increases in their budgets.
Zoom out: The city continues to see growth in property and utility user taxes, while transient occupancy taxes (TOT) are expected to take a slight dip in the coming year, as are taxes from cannabis sales.
At a glance: While the city’s capital expenditures budgets passed Thursday evening show revenues totaling nearly $128 million and expenditures totaling $145 million over the next two years, the balance by the end of the fiscal year 2024-25 should still be nearly $60 million.
- The Palm Springs International Airport budgets show more than $9 million in additional revenue is expected in the coming year compared to the last, and another $7 million in increased revenue should be realized in the fiscal year 2024-25. Expenditures at the airport will also increase, but budget surpluses of $13.8 million and $8.7 million are expected.
- Starting next July, however, city staff expect to see TOT revenue — collected when visitors stay at hotels, motels, and vacation rentals — increase by more than $2 million while sales tax revenue increases by just under $2 million. Utility and property taxes are expected to continue growing.
What they’re saying: “That’s an absolutely remarkable growth in our city,” Councilmember Lisa Middle remarked as she noted annual general fund revenues had increased nearly $50 million since 2019. “I want to give a shout out and a thank you to our business community, to our visitors who come to Palm Springs, to our residents who have invested in our city. We’re passing a budget that we would not have contemplated a few years ago.”
