The Fiscal Cliff

MBUSD Annual Operating Surplus/Deficit ($ Millions). One-time pandemic aid provided a temporary buffer, but the underlying structural deficit created by 2013's enactment of the Local Control Funding Formula has now emphatically returned.

14-1515-1616-1717-1818-1919-2020-2121-2222-2323-2424-2525-2626-2727-28$-8M$-4M$0M$4M$8MSTRUCTURAL DEFICITPANDEMIC RELIEFINSOLVENCY RISK

Status

Operating Surplus

Status

Historical Deficit

Warning

Projected Insolvency Path

SOURCE: MBUSD 2ND INTERIM REPORT (MARCH 11, 2026)

NOTE: PROJECTIONS REPRESENT 'NO REDUCTIONS' SCENARIO TO DEMONSTRATE THE IMPACT OF THE STRUCTURAL GAP.