Palm Springs Measure J fund closes fiscal year with $2.1 million surplus

Palm Springs’ Measure J sales tax fund closed the 2025-26 fiscal year with a $2.1 million surplus, driven largely by sales tax revenue that came in above budget. Director of Finance and Treasurer Kristopher Mooney gave the update to the Measure J Oversight Commission at its Sept. 17 meeting.

Measure J is a locally controlled 1% sales tax originally approved by voters in 2011 to fund essential municipal services and capital improvements. It was subsequently made permanent in November 2024, when voters approved removing its original 25-year sunset clause.

The surplus pushed the fund’s total balance to $56.65 million as of June 30, up from $54.06 million a year earlier, according to a budget summary presented at the meeting.

Sales tax revenue totaled $22.63 million, about $800,000 more than the $21.82 million budgeted. That marked a roughly 6% increase over the prior year, Mooney said.

He told commissioners the fund’s sales tax revenue is consistently driven by three sources — auto sales, restaurants and gas stations — whose rankings shift seasonally.

Interest income also outperformed expectations, reaching $1.63 million against a $750,000 budget. Mooney attributed the gain to the fund’s large cash balance generating strong investment returns.

Combined, total revenue for the year reached $24.26 million, about $1.7 million above the $22.57 million budgeted.

The fund spent $22.12 million during the year. Spending on the commission’s community-initiated grant program remained slow, with $1.7 million disbursed of the roughly $8.2 million carried over for those projects.

Mooney said nearly every approved organization now has at least one payment in hand. He cautioned that the surplus figure could still shift slightly as year-end accounting entries are finalized, but said he did not expect significant changes.

The fund’s balance is projected to decline sharply in fiscal year 2027 as the city ramps up spending on major capital projects. Those include the new downtown fire station and design work for the convention center remodel described as the largest project in Palm Springs history, with a preliminary estimate of $135 million.

According to the finance department’s forecast presented at the meeting, total spending in fiscal year 2027 is projected at $82.1 million, outpacing revenue and reducing the fund’s total balance to about $10.6 million by June 30, 2027.

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