HUNTINGTON BEACH : Recession Shrinking City’s Tax Revenue

The city has been battered by the recession, losing about $6.4 million in anticipated income since 1990, city officials reported Monday night at a public hearing to discuss ways of coping with the budget deficit projected for the next fiscal year.

City Administrator Michael T. Uberuaga told the City Council and a near-capacity crowd at City Hall that the greatest single loss has been the city’s declining share of state sales tax. He estimated that in the fiscal year that ended June 30, 1990, the city’s portion of the sales tax amounted to $18.4 million. The city expects only $17 million in the fiscal year ending June 30, 1993.

Uberuaga stressed that city revenue is falling while population and demands on city services are rising.

“Another well-publicized casualty of the recession is the building industry,” Uberuaga said, predicting that revenue from building permits will drop $500,000 next year.

City officials are predicting a $5-million shortfall for the fiscal year beginning July 1. Various programs face cuts, and numerous speakers appeared before the City Council on Monday night to ask that their charities or special interests be spared.

Two major plans for cutting the city’s deficit have been presented to the council. One plan comes from the Citizens’ Budget Review Task Force and the other from Uberuaga.

Last September, the City Council appointed the task force, asking it to review city spending. The task force’s report, issued earlier this year, sharply criticized city government spending. The report included one option of laying off up to 19 city staff members.

In addition, the task force placed more emphasis on cutting back city spending than the Uberuaga plan. His proposals call for no city staff layoffs and recommends an increase in city fees to raise $2.6 million to help cover the budget deficit.

The citizens’ task force called for only a $1.2-million increase in city fees. The task force also recommended more spending cuts than did Uberuaga.

Phillip Inglee, chairman of the citizens’ task force, warned in a written report to the council that city government’s “attitude toward spending is a paradigm for continued deficits and rising taxpayer discontent.”