A Wake-Up Call: Upland Faces Fiscal Shortfall Due to Decline in Sales Tax Revenue

As we enter the Fiscal Year 2025-26 budget cycle, we’re facing a financial challenge that can’t be ignored: a sharp decline in sales tax revenue. This is a critical issue for Upland, as sales tax revenue is the primary funding source for our General Fund, which supports essential city services like public safety, parks, and infrastructure.

The numbers tell the story: sales tax projections have dropped by $1.68 million—from $25.3 million to $23.6 million. This decrease is due to economic uncertainty including tariffs as well as lower fuel sales and decreased vehicle sales- all of which are beyond the City’s control. The loss of this significant revenue stream means we will have less funding for our community's core services and long-term needs.

This revenue shortfall forces us into a difficult position. The savings from department-wide cuts—totaling about $676,000—must now be used to cover the gap in sales tax revenue, rather than investing in the city’s future through much-needed infrastructure improvements. Roads, parks, and public facilities, which are already in need of attention, will continue to take a back seat as we struggle to make ends meet in the face of these lower-than-expected projections.

Let’s be clear: we don’t know how long this will last. When the economy slows, our reliance on sales tax puts us at risk. This situation underscores the need for a more diverse revenue model that doesn't hinge on unpredictable market conditions. We must look ahead and find ways to balance the budget without sacrificing essential services or our city’s future growth.

I assure you, your City Council is working diligently to find solutions. However, it’s time for all of us to acknowledge the reality we’re facing and take proactive steps to adjust our financial strategy moving forward. The future of Upland depends on our ability to be fiscally responsible today.

I encourage everyone in the community to stay informed, get involved, and share your thoughts as we work through this difficult but important process.

Additionally, shopping local helps bring revenue our way and keep sales tax in our city. Together, we can navigate these challenging times and come out stronger on the other side.

— Councilmember James Breitling