Proof that people are 'cutting the cord' revealed in Elk Grove's mid-year budget projections; Oak Rose transfer preplanned
https://www.elkgrovenews.net/2024/02/proof-that-people-are-cutting-cord.html
For several years, "cutting the cord" has become associated with consumers discontinuing cable TV and internet services. While the trend is nationwide, if not internationally, many municipalities, including Elk Grove, will feel its effects.
On Wednesday night, the Elk Grove City Council will be presented with a mid-year review of their 2024 budget, which ends on June 30. On the revenue side, while the city's budget is slightly ahead of plan, there is one category where there has been a precipitous drop - the cable franchise fee.
The staff report shows that revenue in this category was budgeted at $952,000. However, as of December 31, $675,723 is projected for the year, a $276,277, or 29 percent shortfall.
Cable cutting is the primary reason for the shortage. The report notes, "In the last few years, more individuals have been 'cutting the cord'" and "switching to 'over the top' or 'streaming' TV services."
CordCutters.com reports that in "2023, 47.6 million American households are now cord cutters" and "54.4 percent of all Americans will no longer pay for a traditional cable TV service."
While revenue from the Sacramento Cable Commission, which handles franchise fees, will remain, as more people abandon cable for streaming services, this revenue source will steadily decline.
Interestingly, the staff report, prepared before its Friday, February 23 release, mentioned the recent Oak Rose lawsuit settlement. The report recommended "transferring the $616,835 in additional revenue and the $3 million in savings into the City's Risk Management Fund for costs associated with the Oak Rose legal settlement..."
The Wednesday city council meeting starts at 6 p.m.
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We just need to hang on until the zoo arrives, then we'll be in the money again! If not, I'm ready to vote for another sales tax increase, because I know our leaders are trying hard to scrape by with the little money they have!
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