COSTA MESA : State Budget Cuts Won’t Raise Taxes

The state budget passed this week siphons off an additional $1.1 million from already strapped city coffers, but residents don’t have to worry about their taxes being raised, according to city officials.

While the news from Sacramento was not great, it wasn’t as bad as it could have been, officials said.

The biggest loss to the city’s general fund is the permanent reduction in property tax revenue, estimated at more than $1.1 million.

In addition, the city’s Redevelopment Agency was raided of $330,000 and cigarette tax revenue was decreased by $146,000.

Although the numbers are large, the city should be able to make up the deficit without dipping into residents’ pocketbooks, City Manager Allan L. Roeder said.

“It is better than what was being discussed at the initial outset,” Roeder said. “We will largely be able to follow the council’s directions to make adjustments and cuts without having to use revenue or raise taxes.”

According to city Finance Director Susan Temple, the reductions could be made up largely with $750,000 in savings generated from the hiring freeze and the $700,000 saved when two employees’ groups declined to take pay increases.

Temple also credits the city’s ongoing financial trimming strategy, begun several years ago to protect against hard economic times.

“We have really been looking at long-term solutions so we wouldn’t have to be reactive to situations like this,” she said.

However, the fates of several programs have yet to be decided. Two of the biggest include arts programs and consultants’ fees.

Earlier this year, during grueling budget sessions, the council targeted both for potential cuts, depending on how the state budget would impact the city.

Roeder said his staff will return to the council in the next few months to discuss how or whether they will be funded.

“Before we free any of that up, we will go back to the council and give them an option for absorbing state cuts,” Roeder said.

But while the news is encouraging, Roeder cautions that next year’s budget is just around the corner and future state cuts will mean more city trimming.

“Even though we are able to get by this year without tax increases . . . we need to sit down over the next couple of months and really talk about what city government is going to provide,” he said.