Join the community meeting to discuss Fullerton’s budget shortfall of approximately $13.7 million for the fiscal year 2026-27. Discussion begins at 5:30 pm tonight (Tuesday, July 7) about Fullerton’s Budget Community Meeting #1: Tuesday, July 7, 2026, at 5:30 pm at the Fullerton Public Library located at 353 West Commonwealth Avenue.

Fullerton city officials are projecting a budget shortfall of about $13.7 million for the fiscal year 2026-27. This is concerning because the city’s funds set aside for emergencies are completely used up, and its contingency reserve is down to around 14 percent, which is below its goal of 17 percent. If no action is taken, city staff warn that these reserves could drop to just 2 percent by the end of next year.

The financial problems were made worse by a $2.9 million accounting mistake found during an audit. This issue involved funds that were supposed to go to the Successor Agency but were incorrectly recorded in the General Fund. This error caused the city’s savings to decrease faster than city leaders expected.

To address these problems, the city hired Grant Thornton, a firm that specializes in finance, to look into the mistakes and suggest improvements. They recommend hiring a qualified chief accountant, forming a financial oversight committee, standardizing accounting practices, and making budget information clearer for residents.

In May 2026, the Fullerton City Council directed staff to prepare two proposals for a half-cent (0.5%) sales tax increase: one focused on infrastructure improvements and the other on public safety. This tax increase could bring in about $15 million each year. Fullerton’s current sales tax rate is 7.75 percent, which is among the lowest in the area.

Opinions among residents during public comments at city council meetings about the proposed tax increases are divided. Supporters argue that the city needs this revenue to fix its financial issues, while critics express concerns about trusting city management after recent financial problems. Some residents suggest that any new tax should be dedicated to specific projects, which would require a two-thirds majority to pass.

The discussions about taxes also reflect bigger worries about the city’s long-term economic plans. Many residents are calling for ideas to attract and keep small businesses, reduce ongoing costs, and make Fullerton more appealing to a wider range of people. One idea is to create different commercial-residential areas or “hubs” to help the community connect better.

Even though Fullerton has a plan for growth called the Fullerton Plan from 2012, some critics say the city is not following through with these plans effectively. The downtown area has seen businesses close, and former prime retail spaces are now offices or data centers.

There are concerns about hiring outside experts for various studies. Some residents believe that previous studies have not led to meaningful changes. Additionally, there is apprehension regarding the selection process for any new economic committee that the city may establish. For instance, a political donor was appointed to the Fiscal Sustainability Committee and suggested that the city implement an illegal pay-to-play arrangement for waste management companies competing for the city contract. These ongoing discussions highlight the need for a comprehensive plan to enhance Fullerton’s economy in the future.

Sources

• Voice of OC, “Fullerton Voters May Consider Sales Tax Increase” (Dec. 2025) and “Auditors Question if Fullerton is Properly Overseeing Budget” (June 2026)
• Fullerton Observer, coverage of the Fiscal Sustainability Ad Hoc Committee, the special fiscal audit, and the March 2026 budget presentation
• City of Fullerton budget documents and the Fullerton Plan (general plan)
• California Department of Tax and Fee Administration (sales tax rates); City of Placentia (Measure U)