Monthly Archives: July, 2009
Property taxes in decline
The current economic conditions condensed into the budgetary cloud are brewing one of the darkest storms ever to threaten our city. It is the first time that I have seen revenue from property taxes actually fall. Not just fall in growth, or fall in forecasted percentage increase, or fall in share of revenue, but actually FALL, even when the cost of everything else rises. For a nearly $400 million revenue source for our general fund, a decrease of 2.3 percent is a significant dent in our ability to pay for neighborhood services.
Unemployment fluctuates with old and new seekers
According to the California Employment Development Department, the San Diego region reached a historic double-digit inflation rate in June. Although civilian employment, which reflects the jobs in the economy, hardly changed between May and June, the number of unemployed increased 5.1 percent to 158,000.
What falling sales tax revenue means
The current recession is deeper and broader than most of us have seen in our generation. Consumer confidence was at a 40-year low. Employment in retail sales plummeted, fewer tourists visited, and auto sales reached record lows, earlier this year. All of which means that San Diegans had $17 million less to spend this year on our general fund services such as police, fire, parks and libraries, than last year.
Every cent spent in this economy counts. A cent on every dollar of taxable goods purchased in the city goes to the General Fund. This is the fund that pays for services that the general public receives. The $210 million in sales tax expected to be generated this fiscal year is one of the most significant sources (18.3%) of the general fund. It is also a source that is tapped by the state to support general operations, with 11 states (including California) in the nation raising their sales tax this year in order to avoid drastic cuts that would worsen the recession.
Privatization track record sparks backlash
As San Diego County supervisors seek to privatize more services, public officials elsewhere are reading the danger signs and starting to move in the opposite direction.
