RES 231397 - Laserfiche WebLink

4 City of Pleasanton Operating Budget • FY 2023/24 - FY 2024/25 General Fund Budget by Service Category As described in the chart below, public safety (Fire and Police) comprises 43.1 percent of the City’s FY 2023/24 General Fund budget while General Government is 18.9 percent, followed by Operations Services at 15.8 percent, Library and Recreation 11.1 percent, Community Development at 7.6 percent, and Engineering at 3.5 percent. Please note that Economic Development and the City’s Recycling Program are also included in General Government. The Current Economic Climate • Federal The U.S. economy has fully rebounded from the COVID-19 pandemic, largely due to actions that Congress took, approving a series of stimulus packages that provided assistance to state and local governments, businesses, and individuals, along with the Federal Reserve’s monetary policy designed to stimulate the economy. In fact, the pandemic-induced recession, while very severe, was also very short-lived, lasting just two months. The U.S. economy grew 5.7 percent in 2021, in terms of annual Gross Domestic Product (GDP), the fastest since 1984. However, the massive influx of money into the economy and the prolonged quantitative easing policies implemented by the Federal Reserve, mixed with global supply-chain issues for various parts and products, resulted in inflation rising to its highest level since the early 1980s, at 9.1 percent year-over-year. The Federal Reserve, in an effort to lower inflation, pivoted and began raising interest rates in March 2022. Higher interest rates have already impacted various industries, as it lowers the demand for both business and consumer loans. While the unemployment rate is still near its historical low, the U.S. economy has been showing signs of slowing down, as evidenced by news of a cooling housing market, companies announcing hiring freezes or layoffs, and most recently troubles in the banking industry. With the Federal Reserve’s sights set on bringing down inflation to its target rate of 2.0 percent, interest rates are expected to stay elevated at least through 2023, and there is a growing consensus among economists in forecasting a recession in the next 12 to 18 months. General Government 18.9% Fire 18.4% Police 24.7%Community Development 7.6% Engineering 3.5% Library and Recreation 11.1% Operations Services 15.8% FY 2023/24 Projected General Fund Expenditures by Service Category