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Organization: City of Santa Clarita
Date: March 23, 2009
City Sales Tax Tanks in Q4
Upcoming City Budget Puts Everything on the Table
The City has received its preliminary fourth quarter sales tax figures for 2008 which reveal a 15 percent decrease over the same period one year earlier. Sales tax revenue is the City's top source of funding and the reduction represents the largest decrease in the City's young history.
"In all of my years in local government, I've never seen such a dramatic decrease in sales tax revenue as we are seeing in our fourth quarter numbers. By far this is the largest decrease in sales tax revenue our City has seen in 21 years," explained Ken Pulskamp, City Manager.
Sales tax revenue for the City's fourth quarter totaled $7.3 million. For the fourth quarter of 2007, that number was $8.6 million. The City has seen a steady decline over the last year in sales tax revenue and has continued to make adjustments each quarter. The 15 percent decline in sales tax revenue for the fourth quarter is worse than anticipated and has impacts to the City's budgeting.
"In response to already-declining revenues, the City has already reduced 16 positions and reduced spending in the current fiscal year. As we analyze revenues and work on the new fiscal year budget which begins July 1, 2009, we will definitely be making changes across the board. Everything is on the table as we figure out how to move forward," commented Pulskamp.
In anticipation of a smaller budget, each City department was asked to prepare reduced budgets for the new fiscal year. As the City's Finance team, led by the City Manager works through the budget process, they will be looking at ways the City can further reduce its current expenditures, eliminate non-essential items from the budget and prepare a budget for the City Council that takes into account the reduced sales tax revenues. At the end of the process, City staff will present a balanced budget to the City Council for consideration and adoption by July 1.
Santa Clarita incorporated in 1987 and is a California contract city. The City currently contracts with Los Angeles County for law enforcement, fire, sewer maintenance, animal control, among others to provide cost-effective services to residents. Services provided by the City include road construction, repair and maintenance, parks, recreation, community services, planning, permitting, economic development, arbor, oversight of waste collection, cable television, landscape and facilities maintenance, city elections, special events, transit, and traffic.
