Quarterly sales tax revenues dive

Local government budgets already feeling the pinch this fiscal year got another blow late last week, when the state Board of Equalization said sales tax revenues in the second quarter of 2009 fell short of expectations.

As a result, Sutter County and the cities of Marysville, Yuba City, Colusa and Live Oak all got thousands less than what budget makers might have counted on.

Yuba City finance director Robin Bertagna said the drop of about $74,755, leaving a second-quarter total of $598,000 for her city, is bound to have an effect, especially when considering projections for 2009-10.

While the city estimated sales tax revenues would drop by 4 percent, she said, the state's projections are closer to a 19 percent drop.

"People have cut back on spending, and consumer confidence, however you define it, is probably at an all-time low," Bertagna said.

The loss of funds will give new urgency to talks already planned with employee bargaining units over how to fix expected budget deficits, Bertagna said. The result could be either union concessions or employee layoffs, she said.

"It's not a fun conversation to have," she said. "But as management, we have an obligation to present a balanced budget."

Dixon Coulter, Marysville's city administrative services manager, said the $14,961 the city won't receive is unfortunate, but has to be considered against the bigger picture.

"We're already facing something on the order of $400,000 in sales taxes drop year over year, mostly driven by the closure of Mervyn's," he said. "This is just another drop in the bucket."

The revenue declines, and voter rejection last November of a measure to raise local sales taxes, Coulter said, have put the city in an ongoing make-cuts mode to match staffing and services to revenue.

What Marysville lost was more than 10 percent of the adjusted $119,700 amount it received in sales tax revenues for the second quarter of this year.

Live Oak received $16,100, reduced by about $2,000.

The City of Colusa received $70,500, which was about $8,800 less than expected.

Sutter County's revenues were reduced by about $30,500, and the county received $244,000 for 2009's second quarter, the period of April 1 to June 30.

Neither Yuba or Colusa county nor Wheatland received any revenue reductions, though Yuba County spokesman Russ Brown said there have definitely been fewer sales tax revenues in recent months.

"We don't know what's down the pike for us, but for now, we're like all other jurisdictions, looking at the state to see what happens next," he said.

Local governments that took reductions could've been hit worse: A handful of cities and Amador County received no sales tax revenue in the second quarter because the decline was so great.

The BOE made similar reductions in May and February, and will probably have to do so again for the third and fourth quarters of 2009, according to a press release from the board.

Coulter said while the city can cut expenses to reflect decreased revenues, it's harder to find ways to add to city coffers.

Marysville has little available land for new businesses, he said.

"And it's not the kind of atmosphere where a whole lot of people are building new," Coulter said.

Bertagna, though, said she thinks the state's estimate of how much cities will lose in sales taxes is too pessimistic to be applied to Yuba City.

Many of the city's top retail tax generators are stores such as Walmart and Target, which carry many items people have to buy regardless of their financial situation, she said.

Contact reporter Ben van der Meer at 749-4709 or bvandermeer@appealdemocrat.com