City sales tax update: Yes, you can panic now

The December sales tax collection numbers are in, and the news is not good – not good at all. The city collected just $23.6 million in December. That was not only 11.9 percent less than budgeted, but 4.2 percent less than in December 2007. For the first three months of the fiscal year, we’re off the budget by 7.1 percent. The gory details are here, in our handy clip and save sales tax chart.

Why does this matter? The sales tax is 20 percent of the city budget. Meanwhile, property tax revenues – which provide the bulk of revenue — may also be in trouble. The county has announced that it expects property values to decline by four percent next year, after looking at a three or four percent increase this year.

After the jump, what this means:
There is no way around it. The city will need to cut services, lay off employees or freeze hiring, and reduce other costs to balance the budget. I don’t know that we can afford to keep the 200 extra cops in the budget, let alone any of the other important day to day stuff.

And the situation will be worse next year, given the length and breadth of the recession. The sales tax haul will drop even more, and raising property taxes will be difficult given the economy. So prepare for even bigger service cuts. This could be a repeat of the beginning of the decade, when pot holes didn’t get filled and street lights didn’t fixed.

I wrote about this last spring. I wrote about this in the fall. I am not a genius who can see the future. I do not write this because I want bad things to happen. I’d be more than happy giving up politics for wine. What I want are people who are supposed to know more about this than I do, like Mayor Park Cities, the council and the city manager, to prevent these problems from happening. They made this mess, and now we have to suffer through it.


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