FAQs

The City operates on a Fiscal Year (FY) from July 1 to June 30.

The FY 2026-27 adopted budget includes a projected General Fund shortfall of approximately $1.3 million. The City is using General Fund reserves to bridge the gap between ongoing revenues and expenditures while maintaining current City services. However, reserves are one-time funds and are not a long-term solution for funding ongoing services.

No. The cost of providing City services has increased faster than ongoing revenues. Rising costs for public safety, infrastructure, personnel and other essential services have contributed to the City’s projected budget shortfall.

The City has worked to control costs by limiting spending where possible, carefully managing staffing and vacancies, prioritizing essential services, and securing state and federal grants to help pay for projects that would otherwise require local funding. The City continues to review its operations and expenditures for additional savings and efficiencies.

Reserves are one-time funds intended to help the City respond to emergencies, economic downturns and unexpected costs. Using reserves year after year to pay for ongoing services reduces the amount available for future needs and does not address the ongoing gap between City revenues and expenses.

The General Fund supports many of the City’s day-to-day services, including police and fire services, parks and recreation, street and infrastructure maintenance, code enforcement, community programs, and other essential City operations.

1 cent per every dollar spent

Merced's sales tax rate would be 9.25% if the measure passes.

Yes. Revenue generated by the measure would be locally controlled and used to fund City of Merced services. The revenue could not be taken by the State.

Sales tax generally applies to the retail sale of tangible goods, such as clothing, household items, electronics and restaurant meals. California law determines which purchases are subject to sales tax.

Generally, no. Most groceries purchased for home consumption and qualifying prescription medications are exempt from sales tax under California law. Some prepared foods and other items sold at grocery stores may be taxable.

The City used federal SAFER grant funding to hire 24 additional firefighters as part of a pilot program to strengthen emergency response and expand Advanced Life Support (ALS) services. The funding allowed the City to address the need for additional ALS capacity while also adding firefighters to support Merced's growth.

The SAFER grant was always intended to be temporary, and the March 2027 expiration of the federal funding has been included in the City's long-term financial forecasts. The grant currently funds 24 firefighter positions and the enhanced level of service they provide. Maintaining those positions and this level of service after the federal funding ends would require an ongoing local funding source.