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4 City of Pleasanton Operating Budget • FY 2023/24 - FY 2024/25 <br />General Fund Budget by Service Category <br />As described in the chart below, public safety (Fire and Police) comprises 43.1 percent of the City’s <br />FY 2023/24 General Fund budget while General Government is 17.9 percent, followed by Operations <br />Services at 16.0 percent, Library and Recreation 11.2 percent, Community Development at 8.4 percent, and <br />Engineering at 3.5 percent. Please note that Economic Development and the City’s Recycling Program <br />are also included in General Government. <br /> <br />The Current Economic Climate <br />• Federal <br />The U.S. economy has fully rebounded from the COVID-19 pandemic, largely due to actions that <br />Congress took, approving a series of stimulus packages that provided assistance to state and local <br />governments, businesses, and individuals, along with the Federal Reserve’s monetary policy designed <br />to stimulate the economy. In fact, the pandemic-induced recession, while very severe, was also very <br />short-lived, lasting just two months. The U.S. economy grew 5.7 percent in 2021, in terms of annual Gross <br />Domestic Product (GDP), the fastest since 1984. However, the massive influx of money into the economy <br />and the prolonged quantitative easing policies implemented by the Federal Reserve, mixed with global <br />supply-chain issues for various parts and products, resulted in inflation rising to its highest level since <br />the early 1980s, at 9.1 percent year-over-year. The Federal Reserve, in an effort to lower inflation, pivoted <br />and began raising interest rates in March 2022. Higher interest rates have already impacted various <br />industries, as it lowers the demand for both business and consumer loans. While the unemployment rate <br />is still near its historical low, the U.S. economy has been showing signs of slowing down, as evidenced by <br />news of a cooling housing market, companies announcing hiring freezes or layoffs, and most recently <br />troubles in the banking industry. With the Federal Reserve’s sights set on bringing down inflation to its <br />target rate of 2.0 percent, interest rates are expected to stay elevated at least through 2023, and there is <br />a growing consensus among economists in forecasting a recession in the next 12 to 18 months. <br />FY 2023/24 General Fund Expenditures by Service Category