Walnut Creek, California, has faced a budget deficit of $2.11 million, largely due to a decrease in sales-tax revenues from auto and transportation businesses after the California Department of Tax and Fee Administration changed reporting practices. The city has decided to keep a 10-11 percent vacancy rate citywide and save from tapping the general fund for salaries. These reductions are intended to save about $3.31 million. The issue is still under state review and may affect revenue through until 2027. Despite the shortfall, the city expects the 2026 fiscal year to remain balanced.