The city of Anaheim is at a financial crossroads. As the 1997 Disneyland Resort bonds are set to be paid off early, a $120 million windfall is on the horizon. However, this influx of funds comes at a time when the city is grappling with a substantial budget deficit, raising questions about how this money will be allocated.
The bonds, issued in 1997, were used to build a parking structure for Disneyland and fund infrastructure improvements that facilitated the development of Disney California Adventure. Once the bonds are paid off, the parking structure will be transferred to Disney. This financial maneuver has been a topic of debate among city council members, with some expressing concerns about the transparency and future use of these funds.
The $120 Million Windfall and Anaheim’s Budget Deficit
Councilwoman Natalie Rubalcava has been vocal about the need for a clear plan regarding the $120 million that will become available once the bonds are paid off. During a recent city council meeting, she emphasized the importance of discussing how this money will be spent, stating, “I know we talk about the [bonds], but we haven’t even discussed how exactly that’s going to be spent yet, and everybody keeps telling us it’s already gone.”
The budget deficit for the upcoming fiscal year is projected to consume half of the $120 million in new revenue. This deficit has been a recurring issue, with various city council members, the chamber of commerce, and resort interests previously touting the bonds as a significant boost to the city’s general fund. The general fund is the most flexible pool of money, used for daily services such as police, fire, libraries, parks, and senior programs.
The Impact of the Disneyland Resort Bonds
The Disneyland Resort bonds have had a profound impact on Anaheim’s financial landscape. According to independent investigators hired by the city following a 2026 FBI corruption probe, the bond money was once targeted by a host of Disneyland resort interests who sought to keep it out of the general fund. This revelation has added another layer of complexity to the city’s financial planning.
In a recent city council meeting, members unanimously adopted a budget that used money from the sale of a parking lot and borrowed from reserves to close a roughly $42 million budget gap for the next fiscal year. Acting City Manager Greg Garcia highlighted the transitional nature of the FY 2026/27 fiscal year, noting that the proposed general fund forecast includes a structural gap due mainly to the payoff of the resort bonds.
Projected Revenues and Expenditures
The adopted budget projects the general fund to bring in $645 million in taxes while spending just over $689 million. This discrepancy is attributed to recent labor agreements and new employee positions. Garcia warned that the budget projections do not include expiring labor agreements or potential economic contractions, emphasizing the need for cautious financial management.
Anaheim is expected to see growth in its main tax revenues this fiscal year, which starts on July 1. The city anticipates a 3.8% increase in hotel tax revenue, reaching $253 million. Sales tax is projected to grow by 3.2% to nearly $117 million and property taxes are expected to hit just over $112 million a nearly 6% increase.
Long-Term Financial Planning
The adopted budget includes five-year forecasts that remain positive, with operating sources exceeding operating uses by approximately $60 million in FY 2027/28, growing to over $86 million by FY 2030/31. This financial flexibility is expected to restore reserves compressed during deficit years. However, officials warn that general fund spending has ballooned in recent years, driven primarily by labor, pension, and contractual obligations in public safety.
Garcia noted that roughly half of the $120 million used to pay down resort bonds is expected to balance the existing structural deficit. The remainder will provide opportunities for enhanced services, replenishment of reserves, community improvements, and repayment of existing debt. This financial strategy aims to free up new capacity for capital investment and ensure the city’s long-term financial health.
City council members are slated to have study sessions on how to best manage the incoming general fund money once the bonds are paid off. This proactive approach underscores the city’s commitment to responsible financial planning and ensuring that the windfall is used to benefit the community.
As Anaheim navigates this financial crossroads, the early payoff of the Disneyland Resort bonds presents both challenges and opportunities. With careful planning and transparent decision-making, the city can leverage this windfall to address its budget deficit and invest in the future of its residents.
