Sac City Treasurer to Council: Revenues Falling Short

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(Sacramento, CA)
Wednesday, October 15, 2008

Just three months ago, the city council used a mix of cuts and cash reserves to balance a $58 million budget deficit.  But last night, Treasurer Russ Fehr said the city’s sales and property tax revenues are already falling below expectations.
Fehr: “City’s not going out of business. We’re not ceasing services.  But maintaining current levels of city financial activity just won’t be possible in the short-run future the next several years."
Translation: more cuts to already-decimated city services, perhaps even police and fire – and though officials won’t say so publicly, layoffs are a very real possibility.
Councilmember Bonnie Pannell asked Fehr if the city risked going bankrupt, the way Vallejo did a few months back.
Fehr: “No, not at all. … We have cash to pay all the bills. … I just can’t imagine city of Sacramento getting in a situation like that at all.”
Pannell: “But we still are gonna have to tighten our belts for next year.”
Fehr: “Right.”
Fehr told the council that even after making the mid-year cuts, next year’s deficit will be at least $40-50 million more.