The Measure Z: Kids First Funding Amendment is a measure that will appear on the June 2, 2026, Primary Election ballot. Measure Z ensures the successful implementation of Measure Y without impacting public safety or critical city services.

Measure Y was passed during the 2024 November General Election and designates up to 10% of the city’s unrestricted General Fund for a new Department of Children and Youth.

Measure Y required the city to allocate 2% of its “annual actual unrestricted general-purpose revenues” by January 2025, 5% in Fiscal Year 2025-26, then increase by 1% each fiscal year until it reaches 10% of such revenues by Fiscal Year 2030-31. Currently, $9 million in Measure Y funding has already been reserved from these budget allocations.

It is projected that the growing percentage of the General Fund contributions to Measure Y will cause a city budget shortfall that is unsustainable for the city. Measure Z helps fix this budget crisis.

Unlike a city ordinance that is passed by the City Council, Measure Y was passed by the residents as an amendment to the City Charter, which is the city’s "constitution." Once passed, the budget impacts of Measure Y were analyzed by city staff in a timely manner, and they found that severe projected budget deficits will occur within two to three years.

In fiscal year 2025-2026, the city implemented 5% cuts across city services due to the budget deficit Measure Y has already created. If Measure Y’s funding source does not change, it will result in deeper cuts to vital city services already impacted including police, fire, parks, streets, some current youth programs, and more. By fiscal year 2028, when the Measure Y contribution reaches 7% of the General Fund, the city will face a budget shortfall of more than $20.5 million. At this point, the city’s General Fund will become insolvent.

The Measure Z: Kids First Funding Amendment shifts the contributions for Measure Y from the city’s overall General Fund to our California’s local one-cent sales and use tax, which provides essential revenue to cities for general services like public safety, roads, transportation projects, and more. This shift will move the city out of deficit budgets by FY 2032-2033.

California’s local one-cent (1%) sales and use tax is part of the state's Bradley-Burns Uniform Local Sales and Use Tax Law, providing essential revenue to cities and counties for general purposes. This 1% tax is included within the statewide base rate of 7.25%, and it is generally allocated to the jurisdiction where the sale occurs or the business is located. 

Revenue is used by local governments for public services like public safety, roads, transportation projects, and more.

The Measure Z shift to the California’s local one-cent (1%) sales and use tax will provide $2.5-3.0 million per year to Measure Y funding, based on the city’s historical sales tax revenue. This represents a reduction from projected Measure Y funding, which – at its height of 10% of the General Fund – would reach more than $17 million per year.

Currently, the city already contributes approximately $17 million each year to youth services. An additional $9 million in Measure Y funding that’s already been allocated from past fiscal-year budgets will be protected. Measure Z will build on this foundation, not replace it, meaning more resources and expanded opportunities, not less.

In fact, implementation of Measure Y is in full swing. An ad hoc committee was formed (comprised of staff and council) to develop policy to ensure the measure’s implementation in a timely manner. The city has also begun the recruitment process for the Department of Children and Youth Director and an Accountability Board.

Other than the funding mechanism and necessary legal clarifications for its implementation, there are no other major changes to the provisions of Measure Y.

If voters do not approve Measure Z, then the city’s annual operating budget will continue to be in deficit and require drastic cuts to city services such as public safety, public works and community services. Alternatively, a significant new revenue source would be needed to replace the revenue diverted from the General Fund, such as a voter-approved tax.

>Because Measure Y is an amendment to the City Charter, neither the City Council nor staff have any remedy or authority to address the problem. Other Californian cities such as Oakland and Richmond, with similar laws to Measure Y (“Kids First”-type initiatives), have needed funding amendments like Measure Z to address their budget shortfalls.

The FY 2025-26 General Fund budget included a 5% reduction of all General Fund Departments baseline budgets equating to about $6 million that included the “freeze” of funding of 32 full-time positions, of which 15 of those were Sworn Police Positions. In addition, no annual contributions were made to fund the city’s Consolidated Fiscal Policies, which totaled $2.3 million in the previous fiscal year FY 2024-25.

As we develop the FY 2026-27 budget, the current Measure Y transfer, equal to 6% of total General Fund revenues this year, will require additional reductions beyond those already implemented in the prior fiscal year. These impacts are unavoidable.

The scale of the reductions is expected to be comparable to, and potentially greater than, those adopted in the prior fiscal year. This means further position freezes, service level reductions, and departmental budget cuts are likely. As the budget process moves forward, city staff will identify the specific departments, programs, and positions affected, but clearly the city will experience real and measurable impacts to staffing and the services it provides to residents and businesses.