ANAHEIM : Bleak Tourist Season Blights City Outlook
A bleak winter tourist season darkened by the Persian Gulf War and recession caused Anaheim sales tax revenues to plummet by nearly 14%, the largest quarterly drop in the past decade.
Ken Stone, the city’s program development and audit manager, said Friday that quarterly revenues for the period ending in March totaled $7.7 million, a $1.2 million drop from the same period last year.
Analyzed at the current rate of inflation, Stone said, the decrease represents a 20% loss over last year and is even more severe than the impact of the 1982 recession, when sales tax revenues dropped by 10%.
“When there is a war going on and the economy is in recession, people are worried about their jobs, and they are real careful about discretionary spending,” Stone said. “We view this as the bottom of this recession.”
The city, with an economy heavily dependent on the lure of Disneyland and other tourist-based attractions, is already feeling the ripple effects of the revenue loss as officials continue to maintain a municipal hiring freeze.
The short-term news may only get worse with forecasts already showing a possible $2.5-million decrease in hotel tax revenues for the fiscal year ending in June.
The combined decreases and expected drop in building fees paid to the city by developers has Councilman Irv Pickler predicting that the overall shortfall will total about $9 million before the end of the fiscal year.
“This is the worst it’s been,” Pickler said. “People are not buying and the war didn’t help. Ninety percent of the people I talk to, especially those in the building industry, are talking about cutbacks. We went through the same thing in 1982 and ’83, but somehow the realization didn’t hit me then as this one has.”
With the war over, Stone said he expects consumer confidence to return by late spring and early summer but noted that forecasts predict that any turnaround will be modest.
“We’re hoping people decide to take vacations again,” Stone said.