Cities Strive to Reverse Falling Sales Tax Revenues : Economy: The 1991 countywide decline exceeded the statewide figure. Municipalities compete for new stores.

When Simi Valley city officials and business leaders kicked off a campaign last week to urge residents to shop locally, it was more than a matter of civic boosterism.

A quarter of the city’s general fund budget comes from sales tax dollars, and this sum has been dropping during the past two years, largely because of a slowdown in the economy.

But city leaders also blame the decline on residents who are buying their cars in Thousand Oaks and their clothes in the San Fernando Valley--and leaving their tax dollars in those communities. Under the state’s sales-tax rules, 1% of the price of an item is returned to the city where the purchase is made.

To hammer home the importance of these funds, Simi Valley leaders pointed out that the $446,000 in sales tax revenue that the city received in July alone was enough to pay nine police officers for a year.

Simi Valley is not the only city worrying about sales tax revenues.

According to figures released in August by the state Board of Equalization, taxable sales throughout Ventura County dropped 4.4% from 1990 to 1991. The decrease exceeded the statewide percentage.

“The whole state in 1991 was down 3.9% in retail taxable sales,” said Bob Rossi, a research analyst with the Board of Equalization. “1991 was so low that I’m sure it will be up this year. That’s just a seat-of-the-pants guess because 1991 was just rock bottom.”

Among the county’s 10 cities, the steepest drop occurred in Port Hueneme, where taxable sales plummeted 9.6%. Sales in Port Hueneme totaled $57.8 million in 1991, down from $64 million the previous year.

“We’ve had a number of small stores that have closed,” said City Manager Dick Velthoen. “Plus, people are not spending as much money.”

In Ventura County, only the rural community of Fillmore had a smaller taxable-sales total than Port Hueneme during the past two years. Velthoen said his port city, nearly surrounded by Oxnard, has had trouble attracting major retail businesses.

“It’s a function of not having a freeway location, not having a regional shopping center and not having any auto dealers,” he said.

Although the city supports its local businesses, Velthoen said a “shop locally” campaign such as Simi Valley’s would probably do little good.

“People aren’t going to buy cars or refrigerators or suits of clothes in Port Hueneme,” he said. “There’s no sense asking them to shop in Port Hueneme if the big-ticket items aren’t available here.”

The county’s leader in taxable sales during 1991 was the city of Ventura, where local cash registers rang up $1.2 billion. Yet even that figure fell 4.4% below the previous year’s total.

City Manager John Baker said a slump in auto sales--traditionally the city’s strongest tax producer--probably caused much of the decrease. “Cars are expensive,” he said. Buying one during tough economic times “is going to be a much more difficult choice than going to the grocery store.”

Proportionally, the county’s biggest jump in taxable sales during 1991--11.1%--occurred in Fillmore, even though its total is still the smallest.

But City Manager Roy Payne said the state figures, showing a rise from $47.4 million during 1990 to $52.6 million in 1991, are a bit misleading.

Some of the increase occurred because a major road improvement project along California 126 in early 1990 cut deeply into the sales at restaurants and service stations in Fillmore. Revenues rose again last year after the roadwork was finished.

In addition, Payne said, a company based in Fillmore improperly reported that receipts at its outlets in other cities came from Fillmore. The city’s revenues were wrongly inflated in 1991 because of this.

“That revenue is going to fall off because that has been corrected,” Payne said.

He said Fillmore is trying to bolster its sales tax revenue by luring a new supermarket and drugstore and creating a tourist attraction at an old railroad station.

Camarillo officials have set their sights on an even larger commercial project: a 250,000-square-foot outlet mall.

Camarillo registered about $320 million in taxable sales during 1991--a 2.3% drop from the previous year. Assistant City Manager Larry Davis said the proposed 80-store outlet center near the Ventura Freeway and Carmen Drive could boost the city’s treasury by as much as $800,000 a year.

“We’re very anxious to get that,” Davis said. “We’re looking for more long-term stable revenue. This is a niche in the market we think we can fill.”

One of the county’s strongest retail centers is Thousand Oaks, home to a large auto sales center and The Oaks shopping mall. Bucking the countywide drop in consumer spending, that city rang up about $1 billion in sales during 1991, a slight increase over the previous year.

“It’s fairly stable,” said Steve Elam, the city’s deputy finance director. “But considering what’s been happening with the economy, we’re very pleased with that.”

About 38% of Thousand Oaks’ general fund comes from sales tax revenues, Elam said.

Steve Rubenstein, chief executive officer of the Conejo Valley Chamber of Commerce, said he is not concerned about the new “Shop in Simi Valley” campaign, even though one of its aims is to keep residents from spending their money in Thousand Oaks.

He said consumers in the two communities will probably continue to cross city lines in search of the merchandise they need. Simi Valley does not have the department stores that are based at The Oaks mall, and Thousand Oaks does not have the Mervyn’s or Target stores that do strong business in Simi Valley, he said.

Although its population exceeds that of Thousand Oaks, Oxnard’s sales total in 1991--like its east county rival--hovered just above $1 billion. Oxnard’s total was about 2% below the previous year’s figure, but city leaders believe that a new Wal-Mart store, approved recently by the City Council, should boost its revenue.

As other sources of funding become more scarce, the competition for new retail stores will probably heat up, Ventura County business leaders say,

“As much cooperation as the cities have in things like sanitation, transportation and air quality, the cooperation stops when it comes to competing to locate a major retailer in the community,” said George Scarvelis, executive director of the Oxnard Chamber of Commerce. “It just becomes an extremely competitive deal to compete for retail dollars.”

Sales Tax

Taxable sales (in thousands of dollars) 1991 1990 CHANGE Ventura County $5,397,738 $5,647,007 -4.4% Camarillo 319,700 327,114 -2.3% Fillmore 52,636 47,392 +11.1% Moorpark 76,778 76,381 +0.5% Ojai 71,979 69,984 +2.85% Oxnard 1,053,775 1,075,668 -2.0% Port Hueneme 57,853 64,021 -9.6% Santa Paula 109,659 108,979 +0.6% Simi Valley 608,064 623,675 -2.5% Thousand Oaks 1,088,518 1,082,249 +0.58% Ventura 1,228,387 1,285,466 -4.4%

Source: State Board of Equalization