City of Santa Barbara Faces $5 Million Shortfall

The City of Santa Barbara is looking at a $5 million revenue shortfall this fiscal year because of COVID-related loses in sales and bed taxes. In response, city administrators are sharpening their knives to cut expenses by 5 percent. But even that will leave a shortfall of $1.4 million. 

According to contingency plans provided the City Council, the hope is to make up the difference by asking three of the employee bargaining units slated to receive pay increases to forgo their raises. Should this happen, city councilmembers were told, no layoffs would be necessary for full-time employees. 

This being an election year with the mayor’s seat up for grabs — as well as three council seats — that adds an element of suspense into the proposition. Union endorsements matter, and so do union donations. 

The other option would be for the council to dip further into the city’s emergency reserves. To date, City Hall has already eaten into its reserves to the tune of $10 million and has another $15 million in the tank. 

The council will take a closer look at its fiscal outlook in the council meeting this coming Tuesday.

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