The Morning Report
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Cities like Chula Vista are facing budget shortfalls as their revenue streams — sales tax, property tax, tourism tax — shrink with the economy. Voters in two cities, El Cajon and La Mesa, will vote on sales tax increases on their ballots next week, placed there by city governments as a way to address budget shortfalls.
Scott Lewis went to Chula Vista yesterday and came back with this bleak report:
The officials gathered Tuesday said the Chula Vista was facing a $6.3 million deficit for this year. This means the budget they approved this summer foresees spending $6.3 million more than they look like they will receive. Next year, it looks even worse. The city will have to find an estimated $19 million or cut out that much to craft a budget.
To put it in perspective, the budget is $143 million right now — cutting $19 million from that would mean a slashing of 13 percent of the whole budget.
Tulloch said he has a hard time imagining how that will be possible without actual layoffs. And no, not the classic government “position” cuts where the employees actually aren’t laid off but vacancies eliminated instead. There are about 50 vacancies at the city. Cutting them all wouldn’t even make up half of the shortfall.
I’ve written about the housing fever Chula Vista caught earlier this decade, the flashy additions to its city core — a shining new City Hall as chief example — as the city assumed its influx of cash from new development fees and taxes would continue to flood the city coffers:
But now, with many of its sprawling suburban neighborhoods caught in the vortex of foreclosure, with unsold homes piling up, and with home prices dropping, it’s as clear in Chula Vista as it is in much of the county that the real estate heyday — and its accompanying spending power — is a past-tense phenomenon.
You might remember I rounded up a bunch of the city managers in the county to gauge the impacts of the economic slowdown on their revenues in January.
With everything that has happened in the 10 months since, I’ve started making those same calls for updates on these 18 cities’ financial pictures. I’ll keep you posted as I hear back.