Santa Barbara City Council Works to Stop a Future Financial Slide
John Palminteri
SANTA BARBARA, Calif. (KEYT) – By the looks of it, sales have been slower in parts of Santa Barbara for months, and the real numbers are backing that up.
Three members of the city council siting as the finance committee presented a graphic Tuesday showing city expenses are going up, while revenues are projected to go down.
One of the impacts has been in the area of sales taxes which have been described as ‘softening.’
Strong sales equals a solid flow of funds from taxes into the city’s budget.
The process now is to find either new funds, sometimes through increased fees or make cuts in staffing and services.
One area could be in with cannabis, where the city could potential gain an increased 20 percent tax.
Santa Barbara City Councilmember Meagan Harmon who sits on the committee said, “I fell strongly that we need to increase that to the maximum rate allowable our cannabis tax rate. To me that is the lowest of the low hanging fruit.”
Other tax increases would have to go on the 2026 ballot but that is a long process with a deadline of roughly next June to have the ballot wording and analysis done.
Santa Barbara City Administrator Kelly McAdoo said, “if the council wants to put something on the ballot we would recommend getting started as soon as possible, because there would be some voter education, some polling. If that is the choice of the council or finance committee we would want to get started on that right away.”
Another area where revenues fall flat is from the hotel transient occupancy or bed tax, which is also not providing much help.
A concern was raised about increasing those taxes, potentially affecting bookings.
Councilmember Wendy Santamaria said. “I don’t think we need more hotels, we don’t need more but the ones that are here should be able to have that revenue generated right?”
The group Friends of the Santa Barbara Library strongly urged the city not to cut library funds or the hours of operation.
Barbara Hershberg, the group’s President, said, “they can be lifelines for marginalized populations offering both immediate support and long-term opportunities for growth.”
The Santa Barbara waterfront is being eyed to generate some new money. A suggestion was made to open up some of the parking spaces for overnight and RV camping.
“It has been done in other areas of California and it is very popular.”
Councilmember Eric Friedman said, “that turned out to be one that makes a lot sense and is worth exploring for a lot of reasons. So I want to thank our staff for getting ahead of this. The longer we wait the bigger the hole will be at the end and this is a way to right the ship.”
In the long-term another warning sign was the reserve fund. It’s going down, a trend the city says it will not allow.
The finance committee is sending all of this information and recommendations to the full city council for immediate action.
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