Coronavirus and Elk Grove's coming 2021 budget dominoes

As the budget dominoes fall, who will they look out for? | 

To say the Coronavirus has far-reaching implications is an understatement. With Elk Grove's budget year 2020 winding down, city staff is undoubtedly busily reworking the 2021 budget.

As you think about the city's annual budget, there are a few things to keep in mind. The first thing is that by state law, municipalities must operate under a balanced budget.

Never mind politician's crowing about producing a balanced budget on their reelection mailers. It is city staff members who do the pencil-sharpening under macro directions from politicians' wish lists.

One of the biggest considerations is the largest sources of the city's revenues are sales taxes, especially from the Elk Grove Auto Mall. Car sales are undoubtedly going to be hurt, and with the coming retailer closures, there will be weeks of lost revenues.

One could argue there will be pent-up demand, and once stores are open, they will be overrun with customers. Maybe, maybe not.

From the city's perspective to bad sales taxes are not collected on groceries given the recent panic buying. Alas, what might have been. 

The most likely scenario is we as a nation and locally will have slipped into a recession, which will increase unemployment. When unemployed, consumers spend less, which means less cash for the politician's wish lists. 

For more specific city budget items, let's consider District56 and the swimming pool. Not only will there be lost revenue during the closure of the pool and any events that might have been planned that never can be recovered, the already expected operating loss will widen, and the city will have to consider how to account for this loss.

Will the city hike Mello Roos fees to residents in Laguna Ridge who are carrying the burden of the District56 facility? That would be unfair and burdensome to property owners who already have paid for the majority of that facility that the entire community enjoys.

They could increase swimming pool and meeting facilities' user fees. But how wise would that be during a recession, and what some economist says could be a period of deflation?  

The other alternative is the city could fund the already expected operating losses, which will expand by tapping the city's cash reserve. Taking money out of reserves or redirecting planned expenditures for things like the Kammerer Road expansion will aggravate the real estate developers who fund the city council members campaign, and god knows we taxpayers can't do that.

Speaking of roads, with fewer sales, DMW, and gasoline tax revenues flowing into city coffers, will the multi-million-dollar backlog of road maintenance be an easy pool of money to raid? Will the state redirect SB 1 funds as those revenues fall during the recession? 

The point is, revenues will fall, and the city council, instead of blathering on about attending crab feeds and tea parties with their good friends or acting as an auctioneer, will have to engage in real governance and make tough decisions. Will they show leadership and do what is right for taxpayers, or, more likely, look out for the interests of the political patrons from the landlords at the California Apartment Association and other Granite Bay developers who fund their ambitions?

If the proceeding from the Wednesday, March 19 special meeting when four of our councilmembers stabbed the small guy in the back and bailed out wealthy landlords are a gauge, look out because they'll pick your pocket to support their patrons.  

Look for the city's budget dominoes to fall and they will not be done in such a way to help taxpayers.
Copyright by Elk Grove News © 2020. All right reserved.


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D.J. Blutarsky said...

This City Council has been spending money like drunken sailors ever since they learned how to aggressively tap into the Mello-Roos tax funds.

And like drunken sailors who haven't met a bar they didn't like, this Council has been throwing money at crazy land purchases, economic incentives, feasibility studies, tons of new cops, and an animal resort.

But like drunken sailors carousing the bars on liberty leave, ultimately this Council will over-indulge and have to be carried back to the ship on the shoulders of the Shore Patrol, or in this case, on the shoulders of the taxpayers!

Unlike the drunken sailor who gets written up for unruly behavior, maybe loses a rank, this Council will blame others for the shortage of cash and say sorry taxpayers, we feel your pain. They get the hangover, we get the pain.

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