Socialize

Cerritos Will Continue Studying Budget Cuts


Cerritos Logo

 

By Brian Hews

It did not take long for disgruntled residents to voice their opinion at this past Thursday’s Cerritos City Council meeting.

Budget Manager Ryan Cary presented the proposed cuts in a presentation that took over 30 minutes, then the public comments – at times acrimonious – began.

Most voiced concern about closing the Library on weekends, and also the Cerritos Center for the Performing Arts and how much money that is costing the City.

One resident commented that Cerritos has 1 employee for every 79 residents, wanting to further cut an already depleted City employee base.

A look at Transparent California (TC) confirmed that statement; Cerritos had 625 employees at the end of 2015.

With 49,000 residents that equates to 1:79 ratio.

But over 45%, or 281, of those employees are under the federal poverty level for a family of four, making $24,668 or less.

There was concern too about the 1% sales tax increase that would bring in much needed money to rebuild the City’s crumbling infrastructure and fund the Sheriff’s Station.

A 1% increase would equate to $1 per one hundred dollars spent, or the cost of a half a cup of coffee at Starbucks, but most of the residents were against the tax saying, “people will go outside the City and shop.”

Economists call this “sales tax leakage, ” where residents purchase taxable goods outside of the city they live in because of a lower sales tax rate.

But the latest retail purchasing patterns for Cerritos run contradictory to the residents’ statements about people leaving the City to shop elsewhere.

 

 

According to the City’s own profile, sales tax revenue has risen for the past four calendar years.

From 2012 to 2013 revenue rose $574,000; from 2013 to 2014 revenue rose $334,000, and from 2014 to 2015 revenue rose a healthy $2.376 million.

The growth in sales tax revenue, the profile claims, can be attributed to “renovations and increased in construction activity at the Cerritos Auto Square, the Los Cerritos Center, Plaza 183, and other shopping centers throughout the city. ”

And a study done by HMG-CN of cities that raised their sales tax confirms the lack of “sales tax leakage” after an increase was passed.

The data came from the California State Board of Equalization.

HMG-CN looked at the cities of Palm Springs, Vallejo, San Leandro, Santa Monica, Concord, Santa Rosa, Tracy, Santa Maria, Albany, Commerce, Culver City, La Mirada, Sacramento, Salinas, Vacaville, Pico Rivera, and El Monte.

Only one city saw a drop in sales tax revenue after passage of an increase, and that was El Monte and only in the first year. After the first year the city realized a $13.2 million increase.

All others showed a healthy increase, tiny Commerce saw an increase of $9.2 million, Santa Monica $9.8 million, and Sacramento saw a huge $15.9 million increase.

Still, the residents were not happy about a tax and asked for more employee cuts, scaling back other facilities besides the Library, such as the Senior Center and Swim complex.

They cited upcoming taxes proposed by Los Angeles county, which would drive Cerritos’s rate higher, if passed.

Others wanted to keep the Sherriff’s Station, which represented over 70% of the proposed total cuts. Resident Harold Cohen told the Council he came to the meeting to defend the Sheriff’s Station. “We cannot close the station down, the City has to continue keep the residents safe.”

Comments

comments

Powered by Facebook Comments

One Response to Cerritos Will Continue Studying Budget Cuts

  1. George Ray Reply

    September 1, 2016 at 9:59 am

    Brian,
    Thank you for your reporting and your clarification of the facts around the City of Cerritos potential budget cuts and possible ballot measure in March 2017 on a sales tax increase. If the City Council votes to put the sales tax increase on the ballot the residents will decide the future of Cerritos. In my opinion the city has made numerous cuts to the budget that are not understood by the public. None of the previous cuts have been to services provided to the residents. If you look at the big picture the city has lost over 30 million dollars a year in revenue due to decisions made by the state government and the city is now running a deficit of 6.5 million a year. People can do the math. The city has also deferred much needed maintenance each year for the last 4 years or the deficit would be larger. Yes we can make additional cuts and I think there are areas where we can. But they won’t add up to enough dollars to keep the city healthy and provide the services that as residents we all expect.

    George Ray
    Mayor
    City of Cerritos

Have a comment?