What’s the status of the Sacramento Children’s Fund? City staff give update with budget deficit looming

The Sacramento City Council on Tuesday discussed plans to implement the Measure L children’s fund and how a projected $50 million budget deficit could affect it. 

Voters passed Measure L in November 2022, but the law requires the city to take several more steps before it can begin spending most of the fund. 

The fund is designed to ensure the city spends a certain amount of money on youth development and violence prevention programs for residents under age 25. But if the city cuts general fund spending, it could also cut baseline spending on youth programs by the same percentage, said Assistant City Auditor Farishta Ahrary. 

On Tuesday, the city announced that it is projecting a $50 million budget deficit, roughly double what was forecasted last spring, for the upcoming fiscal year beginning July 1. Measure L will still require Sacramento to set aside money for youth programs, but Mayor Darrell Steinberg said the city will need to work with partners to meet the law’s goals. 

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“There is no greater example in this era of deficits of the need for the most intense collaboration between the SacKidsFirst coalition and the City of Sacramento,” Steinberg said. 

The SacKidsFirst coalition led the campaign to pass Measure L in 2022. Steinberg, who supported the measure, also said that the funding source for Measure L is uncertain. 

Sacramento must set aside the equivalent of 40% of the city’s estimated annual cannabis business operations tax revenue for the fund. Finance staff estimated the city can set aside roughly $8.8 million for the fund during this current fiscal year, but the tax revenue the city makes could be different from its projection. 

Whatever the 40% equivalent comes out to, Ahrary said the amount is supposed to be in addition to the money the city is already spending on existing youth programs. The City Auditor’s Office determined that the baseline, or current, spending on youth programs is $22.9 million. 

Even without considering the city’s projected budget deficit, Sacramento still needs to complete several more steps before fully implementing Measure L. The Sacramento Children’s Fund Planning and Oversight Commission must propose a five-year investment plan running from July 2024 through June 2029. Then the council must approve the plan so the fund can be spent on youth services. 

The commission is scheduled to hear the presentation on baseline youth spending during its Feb. 1 meeting, city staff said. Information on the commission’s upcoming meetings can be found on the city’s website.