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Sales tax revenue drops

Posted: March 24, 2009 2:05 a.m.
Updated: March 24, 2009 4:55 a.m.

Santa Clarita saw its worst drop in sales tax revenue ever in the fourth quarter of 2008 - a 15 percent plummet from the same period the year prior.

"I've never seen such a dramatic decrease in sales tax revenue as we are seeing in our fourth-quarter numbers," City Manager Ken Pulskamp said Monday in a news release. "By far, this is the largest decrease in sales tax revenue our city has seen in 21 years."

Preliminary sales tax revenue figures for the city's fourth quarter of 2008 totaled $7.3 million, according to the release. The fourth quarter of 2007 saw revenue of $8.6 million.

Sales tax revenue is the city's largest source of funding.

"This is worse than we thought it would be," said city spokeswoman Gail Ortiz. "It's very dire, but we needed that information to plan for the future."

In anticipation of less revenue, city officials asked each department to prepare reduced budgets for the new fiscal year, which begins July 1.

As the city's finance team works through the budget process, it will look at ways Santa Clarita can further reduce its current expenditures, eliminate non-essential items from the budget and prepare a budget for the City Council that takes into account the reduced sales tax revenues, according to Monday's release.

"The city has already reduced 17 positions and reduced spending in the current fiscal year," Pulskamp said. "As we analyze revenues and work on the new fiscal year budget ... we will definitely be making changes across the board."

While those 17 open positions have been frozen, Ortiz said Monday it is likely they will be eliminated indefinitely.

The jobs on that list are across the board, she said, including management analysts and positions in the technical services and parks departments.

Ortiz said at this point there is no anticipation of layoffs of city employees.

Several construction projects placed on hold earlier this year will remain that way, she said.

Those projects include a proposed community center in Canyon Country, expansion at Central Park in Saugus and expansion of the Sports Complex at the corner of Centre Pointe Parkway and Golden Valley Road.

The streetscaping work in downtown Newhall and planned library for that community will not be held up, she said, as the funding is already in place.

"One of the things that's been very helpful ... is we have asked the staff to be very cognizant of their spending," she said. "I think there are going to be some fundamental changes to how the city functions."


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