More bad budget news for Santa Rosa

<p>Santa Rosa’s sales tax revenues have taken another dramatic dip, one that Mayor Susan Gorin predicts won’t be bailed out by additional sales tax revenue from the highly successful Cash for Clunkers program.</p><p>“I don’t think we sold that many cars,” Gorin said in response to reports the city’s sales tax receipts through the end of the last fiscal year ending in July came in $3.1 million lower than anticipated.</p><p>Gorin said the bad news likely will force the council by January to implement a new round of cuts, following measures the council approved in June to offset a projected $26 million budget deficit for 2009-10.</p><p>Those cuts included the rotating closure of a fire station, turning off a third of the city’s street lights, eliminating 97 jobs, redirecting the use of Measure O sales tax funds and winning millions of dollars worth of concessions from union and management groups, including police and fire.</p><p>“Even though we planned for the worst case then,” Gorin said, “it’s more of a worse case now.”</p><p>“It may mean even more positions, more programs cut,” she said.</p><p>David Heath, the city’s chief financial officer, said the city’s annual sales tax, which peaked at $33 million several years ago, dropped to around $25 million in the fiscal year that ended in June.</p><p>Sales tax makes up about 25 percent of the revenues that comprise the general fund, the part of the city budget that finances most city operations including police, fire, planning, public works and parks and recreation.</p><p>The impact of the most recent drop in sales tax, however, likely won’t be felt until the 2010-11 budget kicks in next July 1.</p><p>Heath said based on cuts the city has already made and employee concessions now in place, the city should end this fiscal year $1.4 million in the black.</p><p>But a continuing stagnant or worsening sales tax picture, along with annual inflation and the end of concession deals with some labor groups, could force the city to cut $4.4 million to balance next year’s budget.</p><p>Gorin said some of those cuts may be implemented as early as January.</p><p>Heath said the city’s budget forecast indicates its financial woes will get considerably worse after the 2010-11 fiscal year unless the economy improves. The annual deficit could reach $13.1 million by 2013-14 if cuts aren’t made along the way, he said.</p><p>That projected deficit is built on several premises including employee pay raises, the end of current labor concession agreements, the annual inflation rate, lackluster sales and property tax revenue and cessation of any extra Measure O funds being diverted to prop up the police department’s payroll.</p>