The Santa Monica City Council unanimously approved a resolution to declare a state of fiscal distress Tuesday, a move to address financial challenges the city has been facing amid declining tourism revenue and increasing liability costs.

A state of fiscal distress allows the city to seek funds and grants from the state and federal government.

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Unlike what was previously reported, the city did not move to declare a fiscal emergency, which would impact city services.

The coastal city is expected to have the budget of $793.3 million in the 2025-2026 fiscal year, which begins on Oct. 1 after the city council approved the plan with adjusted expenditures estimated at $484.3 million and $473.5 million in expected revenue

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