Sacramento Starts Making Budget Cuts

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(Sacramento, CA)
Tuesday, December 18, 2007


You know how a budget’s supposed to make sure revenues match up with expenses?  Well, both ends of Sacramento’s equation are headed in the wrong direction.
Finance director Russell Fehr says the city’s revenue growth is dropping.
Fehr: “Property tax growth, which was for several years in excess of 10% a year will go down to 2%.  Our sales tax over the last year has actually gone down a little bit.  So our revenue growth is drying up.”
Meanwhile, the city’s expenses are going up – thanks to multi-year labor contracts and increased health and pension costs.
So now the grueling budget process begins.  The city is cutting $3 million from the current year’s budget.  And each city department has until the end of January to figure out how they’d make 10 and 20 percent cuts for the fiscal year that starts in July.  Final decisions rest with the city council.