Irvine councilmembers this week brainstormed how to bridge a budget deficit that only promises to climb if left unaddressed and ended that lengthy discussion entangled in a slew of ideas.
Councilmembers in March learned the city overspent by $6 million this fiscal year, with staffers attributing much of the gap to labor costs outpacing revenue gains. But staffers have also characterized that shortage as a “drop in the bucket” for Irvine, a city with ample reserves.
But councilmembers say they fear the deficit’s potential to grow to $47 million by 2030 if nothing is done.
“We can’t keep operating on a deficit and not expect to go into a hole,” Councilmember Melinda Liu said, echoing her colleagues’ concerns.
Councilmembers have already agreed on some steps forward, including implementing a hiring freeze, delaying the replacement of city vehicles and to audit several city projects to explain how they’ve arrived at a deficit.
More moves taken Tuesday, June 9, included the council deciding to dip into city reserves to balance its general fund for this fiscal year and some councilmembers saying they’d tighten their own spending.
A council majority also supported a 2.4% charge on credit card transactions for city services. Staffers clarified that charge wouldn’t apply to everyday spending in Irvine, such as “buying a gallon of milk” at a grocery store, but only services that the city provides, including permits or taking city classes.
Councilmember James Mai was the most vocal opponent of the idea, saying, “We don’t have a revenue problem. The big elephant in the room that’s not been addressed tonight is workforce.”
The city grew “by nearly 250 positions in the past five years,” he said, adding that “30% increase” has strained city coffers and “you don’t solve that by charging residents more for permits and credit card transaction fees. You solve that by getting control of the cost structure.”
Mai also said he’d like to wait until August, when councilmembers are due to receive a “comprehensive report” of the general fund and expenses, including staffing and labor costs and a breakdown of discretionary spending, before making further decisions.
Councilmember Mike Carroll, who received some support from colleagues, pitched the idea of raising parking fees for out-of-towners who want to park at the Great Park.
“I’d like to know why we’re not charging parking … to understand why everybody going to these lacrosse tournaments from Yorba Linda and everywhere else are not paying $40 to park their car so we can plus this budget crisis,” Carroll said, referring to a recent lacrosse tournament he’d attended at the Great Park.
Liu said those increases could also extend to Fieldhouse, an under-construction sports complex set to open in Spring 2027.
“I believe that’s not so much raising revenue. It’s to make things fair and not allocate the burden of these facilities on taxpayers who don’t use these facilities,” she said, adding, “We can do both. We can raise revenue and we can also cut spending.”
The council agreed to continue their discussion to their next meeting, where they plan to approve the budget for the 2026-27 fiscal year and whether to spend $218,552 on a pilot bus program for the Irvine Unified School District.