Sales Tax Revenue Declines in 4 of 5 Cities : Budgets: The size of the drops suggests that the recession might be starting to bottom out locally. Only Simi Valley posted an increase among large municipalities.
Four of Ventura County’s five largest cities took in less sales tax revenue between September and December than in the fourth quarter of 1990, according to a survey released Wednesday by the city of Ventura.
None of the cities, however, recorded losses of more than 2% compared with the previous year, giving hope that the recession might be starting to bottom out locally.
“I’m moderately pessimistic about the future, and I don’t expect a quick recovery,” Ventura Finance Director Terry Adelman said.
“But I’m hopeful the bleeding has stopped,” he added. He said Ventura’s fourth-quarter sales tax revenue in 1991 was only 1.4% lower than the previous year’s figure for the same period last year. In contrast, the city recorded a 17% drop in sales tax revenue in the July-September period when compared with the figure for the comparable period last year.
Unlike county government, which relies heavily on property taxes, sales taxes are the lifeblood of cities’ economies, representing between 20% and 40% of their revenue base.
City officials throughout the county said that while the Ventura survey seems to jibe with their sluggish economies, the figures cited are only predictions made by state officials.
The figures represent monthly payments made by the State Board of Equalization to cities, and are based on estimates of the sales taxes generated. Actual sales receipts from city businesses have not been tallied yet, said Bob Rossi, a Board of Equalization researcher.
But Rossi predicted that the final figures for the quarter would not be much different than the survey’s estimates. “Everything’s going down,” Rossi said. “It’s not a pretty picture.”
County retailers said they were not surprised by the survey’s results.
“There’s really not too many people even coming in,” said Patty Sandoval, a retail clerk at the May Co. in Oxnard’s Esplanade Mall.
Gary Wells, a clerk at The Broadway in The Oaks mall in Thousand Oaks, said special sales are practically the only way to draw business into the store. “Unless there’s a sale, it’s just not happening,” he said.
Officials in some cities said that when they prepared their budgets, they had expected a sharp drop in sales tax revenue because of the recession. But some said they were surprised by the severity of the declines.
Ventura had projected a 1.45% increase in sales tax revenue for the current fiscal year, which began July 1, Adelman said, But so far revenues are down by 9.4%.
As a result, the city faces a deficit of $5 million to $6 million in the next fiscal year. To compensate for the deficit, the city is considering a 10% across-the-board cut in its $50-million budget, Adelman said.
The biggest loss for the so-called “back to school” fourth quarter was posted by the city of Camarillo, which recorded a decline of 2%, according to the survey.
City Finance Director Anita Bingham said the City Council had projected a 5% to 6% loss in sales tax revenue for the fiscal year when it approved its $10-million budget last July.
Bingham said she will wait for exact sales tax figures from the holiday season before making projections for the next fiscal year.
“My hope is that it won’t get any worse, and that we are at least starting toward a gradual improvement,” she said.
In Oxnard, the city posted a 1.3% revenue loss, according to the survey. “We’re still looking at a downward economy,” city Finance Director Rudy Muravez said.
In July, the City Council earmarked $4.4 million in cuts over the next two years to offset a projected deficit in its $120-million two-year budget.
Muravez said he expects sales tax losses to be closer to the projected statewide average of 4% for the entire calendar year.
More budget cuts might be required, Muravez said. “I would expect the city to continue looking for ways to reduce costs over the next two years,” he said.
Simi Valley posted the only increase in revenue, according to the survey, giving Deputy City Manager Bob Heitzman reason for optimism.
“I think we are starting to see signs of improvement,” he said of the city’s 1.28% increase in fourth-quarter sales tax revenue. Between July and September, Simi Valley had posted a 19% decline in sales tax revenue compared with the figure for the same quarter last year, the survey showed.
Thousand Oaks posted a decline of 1.48%, according to the survey.
“The bad news is we expected the revenues to be a little higher,” city Finance Director Robert Biery said. “The good news is we didn’t get hit as bad as other areas.”
Biery said the city might have to make some budgetary adjustments before the end of the fiscal year to make up for the revenue loss. Sales tax revenue makes up 40% of the city’s $32-million budget. “We’re just trying to ride out the storm,” he said.
Sales Tax Revenue
Net receipts, October-December:
1990 1991 % change Ventura $3,493,236 $3,443,826 -1.41 Oxnard $2,932,222 $2,893,240 -1.33 Camarillo $ 945,852 $ 926,934 -2.00 Simi Valley $1,698,567 $1,720,265 1.28 Thous. Oaks $3,019,449 $2,974,850 -1.48
