City Hall Looking at $9 Million Shortfall

Lay-Offs May Be Unavoidable This Time

With its bed-tax revenues dropping for the sixteenth straight month, number crunchers at Santa Barbara City Hall are preparing for a $9 million budget shortfall. Department heads are being asked to prepare a menu of cuts for City Administrator Jim Armstrong in the next two weeks.

That comes on top of the $10.2 million deficit the council grappled with last year, easing the pain by using up a host of one-time-only revenue sources. Last year, no city employees were involuntarily laid off; that objective will be much harder to achieve this year. Budget guru Bob Samario estimated every bargaining unit representing city workers would have agree to 13-to-14 percent pay cuts to avoid lay-offs, a very tall order. (Contract negotiations between City Hall and the politically influential Police Officers Association have recently gotten underway.)

Meanwhile, the Conference and Visitors Bureau urged City Council to maintain City Hall’s annual commitment of $1.5 million to promote Santa Barbara throughout Southern California as a tourist destination. The CVB has been trying to organize its members to support a new assessment fee that would effectively double the organization’s annual budget. But its representatives wanted assurance that if such an assessment were eventually approved—and a new revenue stream generated—the City Council would not then vote to withhold the $1.5 million the CVB is now allotted.

If and when such an assessment will happen remains uncertain. City hotel rooms were 5.2 percent less full in 2009 than they were the year before, but more damaging to City Hall coffers, the room rates charged by hotel and motel owners dropped even more, by 10.6 percent. Tourism, according to the CVB, generates 8.2 million visitors, translating to $1.59 billion in business and 20,000 jobs.

There is talk of a medical marijuana pot ordinance being placed on the November ballot. Even if successful—which requires a 51 percent vote—the revenues generated would not be available for some time.

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