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State sales tax slumps

City loses more than $260,000, county loses more than $560,000 as purchases drop off

Posted: November 30, 2009 10:26 p.m.
Updated: December 1, 2009 4:55 a.m.
 

A recession-driven slide in sales tax revenue will cost the city more than $260,000 and the county more than $560,000, according to a state report released Monday.

City officials said the news comes as no surprise.

"Sales tax is down everywhere," said deputy city manager Darren Hernandez. "This is the worst recession since the Great Depression."

The agency will give Santa Clarita nearly $1.5 million as part of an advance payment on sales tax revenue collected July through September - less than the expected $1.7 million. Meanwhile, Los Angeles County will get about $2.8 million, less than the nearly $3.4 million it expected.

The California Board of Equalization on Monday alerted more than 500 cities and counties of the drop in those months.

The state agency gives sales tax dollars to the local governments where the purchases were made. The agency made an 11.5 percent cut to payments made in November for sales tax collected July through September.

During the same period, actual sales tax collected across the state was down 14.9 percent.

Officials blamed the recession.

The economy was deep in the tank in July, when the city drew up its 2009-10 budget. Even then, city officials planned to pinch pennies.

"We have already accounted for a revenue reduction roughly the size of this," Hernandez said.

However, city officials are hopeful holiday season sales will help make up for the earlier losses.

This trend is not new, according to Board of Equalization officials. In the second quarter, the agency reduced payments to cities and counties by 14.4 percent, with actual cash receipts showing a drop in sales tax revenue of more than 18 percent in the second quarter of 2009. The second quarter includes April, May and June.

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