Goleta Makes Budget Cuts to Stay in the Black

The City of Goleta is keeping an eye on its bottom line as pandemic-related losses are expected to continue. “Massive unemployment increases and eroding consumer confidence” have led to sharp declines in sales and bed taxes, as well as user fees and other revenues for the city, City Manager Michelle Greene and Finance Director Luke Rioux wrote in a 94-page report of proposed cuts for Tuesday night’s meeting. Added to that is a 12-month deferment of sales tax that Governor Newsom ordered, of up to $50,000. Ultimately, a budget shortfall of $5.8 million in the General Fund of $24 million is likely unless budgets are trimmed.

Schools are expected to remain online to a large extent — including the economic engines of UC Santa Barbara and City College — through the fall. Consumer confidence in travel is not expected to revive until a vaccine is discovered and approved, which could take another year. And, as teleworking and online shopping become standard, a normal level of consumers in stores and restaurants isn’t likely until next January. Goleta foresaw the next year will continue to see a downturn in income generators like tourism and school visitors.

Because of the Revenue Neutrality Act that handicapped Goleta’s finances when it split from the county, half its property taxes and a portion of sales tax go to the county. Sales and bed taxes, as well as other fees and charges, are expected to drop by more than $1.8 million for the fiscal year. They account for 61 percent of the General Fund revenues for the city. Cannabis taxes are about the only increase, of $70,000 for the year.