With the majority of votes counted and the June 2, 2026 election results set to be certified at the end of the month, the tally shows that Measure D, the City of Monterey\u2019s potential 0.375-percent sales tax increase, has failed at the polls<\/a> by about 160 votes.<\/p>\n Monterey city staff anticipated that the tax measure would generate<\/a> about $3 million in its first year and $4.5 million in subsequent years. With its failure, they had to find different strategies to compensate for the operating deficit projected in fiscal year 2026-2027.<\/p>\n Monterey City Council unanimously approved the budget on Tuesday, June 16.<\/p>\n \u201dIt is no secret that our cost model that we have employed for a number of years just isn\u2019t working anymore,\u201d said Monterey City Manager Dante Hall at the meeting. \u201cOur revenues are relatively flat and we\u2019re seeing growth in expenditures and in cost just like everyone else is, and so we have a deficit.\u201d Hall said that city staff have balanced the 2026-2027 budget, \u201cbut it doesn\u2019t solve the problem.\u201d The upcoming budget anticipates roughly $114 million in revenue and $126 million in expenditures, leaving about a $11.7 million operating deficit. To make up for the gap, the city will not tap into its reserves but will use funds from the Neighborhood Community Improvement Project fund<\/a> and freeze 30 unfilled city staff positions, among other strategies.<\/p>\n To determine which positions to freeze, each city department assessed the legal obligations, operational needs, potential risks and financial impacts of not filling the positions, such as productivity impacts and potential overtime costs. By freezing the 30 positions<\/a> \u2013 which include two park maintenance workers for a savings of $206,000, two police officers (saving $364,000), three firefighters at $477,000 and a traffic engineer at $231,000 \u2013 finance staff estimates a total savings of approximately $4.6 million.<\/p>\n