The Taft City Council Finance Committee met Tuesday to consider the city’s 2009-10 budget amid concerns that the state could take as much as $600,000 from the city to solve California’s $24.5 billion budget deficit.
Mayor Dave Noerr told committee members that threats from the state to take gasoline tax revenues and street repair and maintenance funds to solve the states budget crisis created uncertainty for city finances.
“We have to build into our budget some fail safes and watch out for trapdoors from the state” Noerr said. “We have to be prepared.”
The city of Taft is in relatively good financial shape compared to other local governments that are being forced to layoff staff and law enforcement personal because of the economy and declining revenues.
The city does not plan to layoff any city staff or law enforcement personal.
The city has been fortunate because of healthy financial reserves and a balanced budget resolution which requires the city to spend only those funds that it collects and avoid deficit spending.
Also, city sales tax revenues are up this year and have not fallen like they have in other cities in Kern County reassuring committee members that they will able to maintain city programs and prevent staff layoffs.
However, the city could still face financial uncertainty because of what the state legislature might do. The legislature is looking to take local government revenues to fix the state financial problems and avoid cutting state programs. The Governor has said he would veto any tax increase to solve the crisis.
Noerr said that he wanted to send a balanced budget to the full council, but given the state’s financial condition, the city could be forced to reconsider the budget and project funding in the future if the state acts.
The committee not only has to worry about his years budget and what the state might do. The state could come back in 2011 and take more dollars to fix future state budget problems.
“This year is hard, next year is going to be impossible,” said Councilman Cliff Thompson who reminded the committee that the city has to plan for present and future financial takings by the state.
The committee reviewed a second draft of a proposed budget presented by city staff that had already had $440,000 removed from an initial draft. The committee was told by City Finance Director Teresa Statler that more cuts had to made to the second draft before the budget could be balanced.
“We have to cut as much as possible this year and next year,” Thompson said. “It’s going to take some sacrificing.”
The Finance Committee will meet again on July 9th to draft a final budget for full council consideration and approval.