The last time we delved into the city finances in detail was three plus year ago here. What we saw back in 2022 was
A tentative budget proposal indicated the city could dip into its reserves by $2.5 million this year and again by $4.8 million, $5.3 million and $5.6 million (Ed: that's $18.2M or 40% for those keeping track at home) over the following three years until a surplus is again achieved in 2025-26. But as (City manager Lisa) Goldman pointed out, the projections include considerable planned infrastructure spending that could be pulled back if needed.
Fast-forward to today and the Daily Journal did some summarizing as follows
The city’s revenue will likely sit at $92.5 million for the upcoming year (i.e. the 2025-26 year), more than enough to cover the city’s planned expenditures of $85.5 million.
However, a planned $9.9 million transfer to the capital improvement fund — which will focus on the city’s potable water system and sanitary sewers this year — plus more than $3 million for debt services, will leave Burlingame at a $3.6 million net operating deficit.
Our extensive water system will slurp up capital monies on an on-going basis due to the waves of investment made over time, and thus aging out over time, as detailed here. Water isn't getting any cheaper. The ECR repaving and "good roads" mentioned in the 2022 post are still elusive. There are plenty of orphan hub caps on ECR to this day as we await The Little Big Dig.
Vice Mayor Michael Brownrigg emphasized that the city was making an investment choice into long-term capital projects and that the operating budget for Burlingame’s essential services was still in a healthy place.
At a budget study session May 21, City Manager Lisa Goldman said the city might consider raising its transient occupancy tax from 12% to 14% in coming years.
Currently, Burlingame’s transient occupancy tax is its second-highest revenue source and will bring in a projected $22.8 million for the upcoming fiscal year. Its most fiscally beneficial revenue source is projected to be property taxes, at $35.8 million.
The TOT is an easy target as it is buried in the hotel bills paid by visitors. The bigger question is how fast the "recovery" will happen. It was $29 million from the tax in 2018-19, nearly 35% of the city’s revenue that year so still $6.2M short and there are more hotels in nearby cities siphoning off some travelers. Thus the new budget is good, just not great.
David Crane at Govern for California is out today with some state-level figures that highlight how out of control things are in Sac. B'game, by comparison, is pretty well managed:
State employees in the Gavin Newsom Administration haven’t had it this good since Gray Davis was governor. Since taking office in January 2019 and including the 2025-26 budget he will soon sign, Newsom has increased staffing 21 percent and compensation 48 percent even as the state’s population declined.
When Newsom took office in January 2019, the state’s unemployment rate was 4.2%, just five percent higher than the national unemployment rate of 4.0%. But by May 2025, California’s unemployment rate was 5.3%, 26 percent higher than the national unemployment rate of 4.2%. That’s a 450% increase over Newsom’s term.
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Notice there is some compounding here: If the state employment had stayed level, the overall state unemployment rate would likely have been even larger. Back to GFC:
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Clearly, California has become less attractive to employers — and in my view, you ain’t seen nothin’ yet. That’s because of inevitable tax increases to cover deficits papered over by Newsom and escalating payments on unfunded pension and other obligations to — you guessed it — public employees. What employer or entrepreneur wants to add employees in a state that is going to raise taxes? This is also true in cities that, like the state, reward public employees with excessive staffing and compensation and build up huge unfunded retirement obligations. While a small number of small-employment industries like AI might need to locate in cities like San Francisco, the vast majority of California’s 20 million workers live elsewhere.
Posted by: Joe | June 27, 2025 at 11:14 AM