What's at stake:
Jousting over Fresno’s budget began Thursday morning, kicking off a process that will run until the end of June. Most councilmembers thanked Mayor Jerry Dyer for including many of their priorities in his proposal.
If any Fresno city councilmember would have pointed remarks for Mayor Jerry Dyer during his 2026 budget presentation, it would be Miguel Arias.
And that’s exactly what happened at the City Council meeting Thursday.
Dyer and budget staff have painted a tough financial picture for the city ever since a midyear review in February.
The second-term mayor even said Thursday that the projected deficit for the 2026 fiscal year climbed from 20.6 million to $50 million, before budget staff came up with cost-cutting measures to help balance a budget proposal.
But as the city tightens its belt, it’s also jumping into new, pricy financial obligations. Dyer has proposed the city undertake a $100 million bond in order to pave streets over the next three years. Dyer said that arrangement would allow the city to get key road repairs done now, and foot the bill later.
Additionally, the city is using the same strategy for a fire station in northwest Fresno, along with a 911 communication center.
But Arias’ issue was with Dyer adding new positions in his budget proposal, in the midst of belt-tightening.
“The messaging is unclear,” Arias said. “If we’re in such dire financial situation, why are we adding more employees to expenses?”
Dyer clarified that all 41 positions in his budget proposal would be covered by special revenue sources with limited uses. He added that not a single new position is being funded by the general fund — which he said was a first for him entering his fifth city budget cycle.
A big cost-cutting strategy in Dyer’s proposal is a 6% vacancy rate in almost every city department, which is projected to save the city $25 million.
Arias questioned why that’s not being referred to as a hiring freeze. City Manager Goergeanne White clarified that the city is still making hires and wants to attract the best candidates, but city departments are not going to have vacancy rates below the 6% threshold.
“When you send a message that there’s a hiring freeze, that word gets out and our applicant pool goes down,” White said Thursday. “So that’s why we have just been very, very intentional on our hiring.”
White added that hires will only be made in departments that have room in their budget, and for positions that need to be filled.
‘We have cut to the bone,’ mayor says
Councilmember Nelson Esparza asked Dyer how residents would hurt from the cuts in his proposal. On top of the 6% vacancy rate in most city departments, each department director was tasked with making 5% cuts — none of which impacts personnel.
During last year’s budget process, department directors were tasked with cutting 3% of their budgets, too.
“I think we’ve gotten to the point where we have cut to the bone before we start seeing severe service impacts,” Dyer said, referring to challenges that could appear in later years.
White agreed with that assessment.
“I think that the impact to residents — I don’t think they’re really going to feel a whole lot,” White said. “Can’t say that for next year.”
White said the impacts right now would be “just a smidge.” That includes The Hop, Fresno’s free trolley service, which will no longer run on Thursdays with the exception of ArtHop nights.
A dozen labor contracts are up in the air
Dyer’s proposed budget includes salary increases for union-represented workers citywide, but he said he couldn’t get into details. Although he has budgeted for personnel needs, he doesn’t know if that will match up with demands from different labor unions.
Dyer confirmed 12 different labor contracts are up for negotiation, and many expire on June 15. It’s unclear how soon those contracts will be renegotiated, but different labor unions in Fresno wield varying levels of political power that could shift major decisions.
At several points during Thursday’s council meeting, Dyer and White both referred to how the 2027 fiscal year will be much more challenging than 2026, and much of that has to do with labor union contracts and personnel costs.
Those costs have dramatically increased in recent years, especially after city officials greenlit new financial obligations for the police and fire departments using temporary federal funds a few years ago. Those funds are depleted now, but the financial obligations remain.
Back in February, White told Fresnoland that the city will have to deal with the consequences of those decisions.
Now, in the absence of those temporary federal funds, Dyer has begun considering whether a local sales tax could generate revenue to cover those same financial obligations for the city’s police and fire departments.
On the dais, Arias said he wouldn’t support taxing Fresno residents to cover the cost of expensive labor union contracts.
“I don’t think there’s any foundation for us to go and ask residents — who are already living with inflation — to tax themselves even more for the benefit of a handful of interest groups,” Arias said Thursday. “So I want to be clear, if we start this conversation about a local tax, I don’t see the rationale in this budget proposal for such a move and I would publicly oppose it.”
