Another prediction coming true. I sure hope our city leaders are not really surprised by this, because it will probably get worse when the state starts taking more money to shore up their $14 billion dollar deficit.
From the Bakersfield Californian:
City sales tax revenues dropped a sharp 13 percent this quarter compared with last year, becoming "something we're going to have to deal with," officials reported Friday.
Those revenues are the single largest contributor to the city's general fund, said City Manager Alan Tandy.
"It's been an uncomfortable trend when it was a 1 or 2 percent decline," Tandy said. "When it accelerates to a 13 percent decline, it becomes something we're going to have to deal with."
Tandy said the declining revenues correspond to the housing market slowdown. During the recent boom, people earned more and spent more. But with the dip in real estate, consumer habits have changed.
He said it's too soon to tell what the declining revenues will mean for next year's budget. Planning for the 2008-09 fiscal year will begin in January. Budget planning for next year will be "constrained to anything that incurs new costs or expenses," Tandy said.