Voice of OC75%
Fullerton to Defund Staff Positions and Consider Sales Tax Increase to Curb Deficit 27%
By Spencer Custodio70%
7/20/2026, 1:00:00 PM
BS Summary: This article contains 31 faulty reasoning types, including Framing Effect, Post Hoc (False Cause), and False Dilemma, with Pessimism Bias as the most egregious example at 9.6% saturation with 128 hits. Analysis detected 1,483 faulty-reasoning hits from 1,330 analyzed words, generating a BS Score of 38.5% and a BS Rank of 27% (16,004 of 21,887 articles). This article is better (less manipulative) than 73.10% of the article peer group.
Fullerton City Hall.
Fullerton City Council members are expected to consider a sales tax increase and adopt a budget that defunds a host of vacant employee positions throughout the city in an effort to slow down a growing structural deficit.
“We find ourselves in somewhat of an impossible situation, where we’re looking at a situation where anybody paying attention saw this coming maybe five, six years ago,” said Councilman Nick Dunlap at a July 14 public study session on the budget.
It comes as staff was able to reduce the projected deficit from nearly $14 million to $3.8 million in three proposed budget options that council members are expected to decide on at their 5:30 p.m. meeting Tuesday.
“We are in a situation not where we want to cut,” Dunlap said at last week’s council meeting.“
It’s not a popular decision, it’s not something you really want to do.
But it’s something – given the circumstances – we have to do.”
In last week’s agenda report , city staff noted a host of proposed spending cuts in order to reduce the spending gap.
“These include ongoing operational efficiencies, discretionary operating expenditure reductions, unfunding vacant positions, updated revenue projections and limited one-time funding sources.
These actions significantly reduced the projected deficit, however, staff requires additional policy decisions to fully balance the budget,” reads the staff report.
Some of the one-time funds could include using dwindling reserves – money that auditors from the contracted firm, Grant Thornton Advisors, have warned is becoming dangerously low.
Anne Layne, director of Risk Advisory for Grant Thornton, told council members that the three proposed budget options – each with increasing cuts and defunded vacancies – can only carry the budget for so long.
“Even with the cuts that are being proposed this evening, there’s only so far the city can get where it’s below its required reserve levels,” Layne told council members last week.
It comes after city staff miscounted for $10 million in reserves earlier this year when it was money allocated elsewhere in the budget.
That brought the city’s reserve budget down to $16 million and pushed city council members to hire Grant Thornton Advisors.
A view down N.
Harbor Blvd. towards Downtown Fullerton on Oct.
5, 2025.
Credit: ERIKA TAYLOR, Voice of OC
Last week, city staff presented council members with three budget options – known as Scenarios A, B and C .
All choices mean defunding vacant staff positions – something all city council members and a host of department heads expressed concerns over.
Layne said all three options will eventually have the same outcome.
“There’s only so many expenses that can be cut before there starts to be a major negative impact to the citizens of the city.
Eventually there needs to be consideration of revenues and how those revenues can be increased,” Layne said, adding that tax measures and economic development can drum up revenue.
“Either way, eventually the revenue’s got to go up because you can only cut the expenses so much,” she said.
Cities typically keep certain unfilled positions funded – known as vacancies – through budget allocations because employees regularly find work elsewhere or retire, making it easier to hire replacements.
Defunding those vacant positions means the city can’t fill those vacancies – essentially eliminating the positions without laying anyone off.
Scenario A means the least amount of cuts and defunds 11 vacancies while leaning on budget reserves.
Scenario B defunds 27 vacant employee positions while not drawing on reserves for the first year.
Scenario C defunds 35 vacancies while not relying on reserves.
The most aggressive spending cut option, Scenario C, only balances the budget for three years – meaning spending will again outpace revenues by the end of the decade.
Mayor Fred Jung took responsibility for the budget.
“It’s my fault and I own that,” Jung said.
“I’m sure to some it might sound like excuses and that’s fair – perhaps they are.”
Jung said he supported various employee pay raises over the years to prevent staff from leaving the city.
“This all came at a cost,” he said.
Councilman Ahmad Zahra, who regularly disagrees with Jung, said everyone on the city council bears responsibility for the budget crisis.
“I think we all are responsible – I don’t think it’s the responsibility of one person to claim that.
I think everybody is responsible.
We all are,” Zahra said.
The mayor also supported the idea of a sales tax increase and said council members can’t cut their way out of the budget crisis.
“I came to this city adamantly opposed to any sales tax increase.
And with a better understanding of how this government works, I understand the value of one.
Particularly when we don’t have a robust mall … like Brea, or an amusement park, sports teams, ample tourism like Anaheim.
Which also by the way has their budget challenges too.”
Jung said.
Fullerton isn’t alone in grappling with a bleak budget – cities across Orange County are scrambling to reverse structural deficits.
“Just like Irvine, Orange, Santa Ana, Huntington Beach.
Get the picture here?
There’s a running theme,” Jung said.
Zahra also supported a sales tax increase ballot measure.
“On the short term, we need to have this and this has to happen at the next meeting,” he said.
The councilman also said city officials need to roll out assurances to voters so money isn’t misallocated again – like the $10 million that was thought to be in reserves, but was allocated elsewhere.
“We need to have a set of mechanisms in place – protection mechanisms – so this misallocation situation doesn’t happen again,” Zahra said.
Multiple potholes at the intersection of Orangethrope Avenue and Pomona Avenue in Fullerton on Saturday, Sept.
17, 2022.
Fullerton City Manager Eddie Manfro told council members all three budget options mean cuts to services across the city.
“I personally don’t take any of this lightly.
I can tell you certainly these have been difficult conversations with my executive team,” Manfro said.
“We’re trying to figure out our options for dealing with scarce resources.”
“This is a non-layoff scenario right now, but that doesn’t mean it’s without pain,” he said.
Fullerton Police Chief Jon Radus said his department will feel some of that pain since each of the three budget options means losing at least two vacant police officer positions, one lieutenant and one corporal.
“Unfunding the police lieutenant will result in a lack of oversight or supervision,” Radus told council members at last week’s meeting.
“Brea police department’s about half our size, they have two police captains and four lieutenants.
I currently have two police captains and five lieutenants.”
The proposed budget options also impact the Fullerton Fire Department as all three scenarios defunds an administrative deputy chief position.
“I’ve never not had this position and in just the last month and a half that position has been vacated and I have been taking on that work, it is a lot.
And some of those key responsibilities will affect other departments,” Fire Chief Adam Loeser told council members.
A host of other departments like the library, public works and parks and recreation will also be impacted.
Depending on which budget option council members adopt on Tuesday, that could mean less park maintenance, a reduction in graffiti removal, more unfilled potholes, less library books being obtained and less library security.
“The city wants services.
The city wants employees that stay, which is why we had to vote for those union contracts to make sure people weren’t continuously leaving,” Councilwoman Shana Charles said at last week’s meeting, adding her support for a sales tax increase.
Councilwoman Jamie Valencia said the city “needs to live within our means.”
“I know this is difficult for the city, I know this is difficult for us,” Valencia said, blaming past councils for the budget crisis.
“It doesn’t come lightly at all.”
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