Declining auto prices, retail closures and the overall slowdown in the economy has led to the reduction in revenue. As have increased unemployment, dipping real estate values, a lack of access to credit and unstable consumer confidence, city officials concluded.
Specifically, the figures based on the first six months of the 2008-09 fiscal year include depressed revenue projections. Of the $1.97-million decrease in revenue, city officials are asking the council to revise the budget to reflect a $500,000 adjustment in sales tax. However, revenue from sales taxes generated over the holiday shopping season as well as current property tax fees have not yet been tallied and will become available in April.
Mid-year budget adjustments are not uncommon. Last month, city officials implored department heads to cut 5% from their budgets for the coming fiscal year because of an expected $7-million deficit.
The unemployment rate in the Glendale-Burbank regions stands at 7.8%, according to recent figures. Eighty percent of the budget is dedicated to labor and salaries.
In 2001, Burbank faced 10% budget cuts. The current deficit could lead to services being reduced and vacant positions going unfilled, officials said.
As of Dec. 31, fees and permits total $1.1 million, down 30% from the previous year, when large commercial projects helped offset the slowdown in residential activity.
Transportation has also played a role in the city possibly receiving fewer funds than it anticipated. For six months, from July 31 to Dec. 31, air traffic at Bob Hope Airport measured by total revenue passengers was down 16% compared with the same period last year. The Transient Occupancy Tax is down 12% citywide as of Dec. 31, the report states. Revenue from parking and traffic fines was adjusted by $200,000, in part because the city’s parking citation processor has been slow to remit some payments.
Despite the grim economic circumstances, Burbank had a vacancy rate of 4% for commercial properties in the last quarter of 2008. Moreover, the city’s sales tax has outpaced the average growth for cities in the county and state in the past two quarters, according to the report.
Property taxes are tracking 10% over last year, with $11.4 million in revenues. Similarly, the Utility User Tax totaled $9.4 million and is tracking favorably compared to previous projections.
And, as the state faces a $42-billion deficit for the next two years, Burbank city officials have managed to steer clear of making risky investments. City Treasurer Donna Anderson indicated last month that the market value of Burbank’s $400-million stock portfolio is down 4% since December.