# California municipal budget deficits and tax proposals > Live situation record from CLSTR: https://clstr.news/situations/california-municipal-budget-deficits-and-tax-proposals > Updated: 2026-09-30T19:28:07.000Z. Sources: 4. Developments: 2. Various California municipalities and counties are facing significant budget deficits and are proposing sales tax increases to stabilize their finances. In Orange County, Santa Ana is seeking to make its 1.5% Measure X sales tax permanent to avoid a projected $30 million deficit by the 2028–29 fiscal year. Other cities, including Orange, San Clemente, and Costa Mesa, are also pursuing measures to address financial instability. In Tulare, the City Council has proposed a 1-cent sales tax increase to combat rising costs related to inflation, pension obligations, and homelessness. Similarly, Santa Cruz County has declared a state of fiscal distress due to a projected $30 million general fund shortfall for the upcoming fiscal year, with potential gaps reaching $285 million over six years. To protect essential services such as mental health care and food security, the county board of supervisors has approved a proposal for a five-year, half-cent sales tax increase to be placed on the November ballot. ## Timeline ### 2026-09-30: Santa Cruz County faces $30 million budget shortfall Santa Cruz County officials warned of a $30 million budget shortfall during the first State of the County address, proposing a half-cent sales tax increase to address long-term fiscal distress. 2 sources. https://clstr.news/cluster/santa-cruz-county-faces-30-million-budget-shortfall ### 2026-09-02: California cities propose sales tax increases to address budget deficits Multiple California cities, including Santa Ana and Tulare, are proposing sales tax increases on the November ballot to combat structural deficits, rising pension costs, and inflation. 2 sources. https://clstr.news/cluster/california-cities-propose-sales-tax-increases-to-address-budget-deficits --- Cite as: California municipal budget deficits and tax proposals. CLSTR, https://clstr.news/situations/california-municipal-budget-deficits-and-tax-proposals