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| Image: Chico saw a 7.7% drop in
sales and use tax income in last year's last quarter. The Q408 Sales tax report is available (see here). Things don't look great for Chico (-7.7%), however, they look even worse at the county (-8%) and the north state region (-11.4%). The Q408 quarter is described as the worst holiday quarter since 2003. That may not seem like a big historic low (just 5 years ago), but if you look at the city spending increases since 2003 you'll see that any drop in revenue during this time frame coincides with significant increased spending. In fact, at a recent budget update the city declared it had achieved the lowest rate of increase to payroll in years. It was as if a year-to-year increase didn't count as more spending. A Reduction to the "increase in spending" is not a cut. The sales tax report states that... Lower fuel prices and decreased sales from new auto dealers, department stores, family apparel, restaurants with liquor, lumber/building materials and electronics/appliance stores were partially responsible for the decrease. A delayed allocation temporarily reduced receipts from home furnishings and a recent closeout decreased revenues from specialty stores. So it sounds like at least in one case a store closure locally has not resulted in a spread of that store's sales to other businesses. There is absolutely no discussion in the report of where the 44% increase in contractor sales tax income comes from. It's possible that the last reported quarter was so low that regular business levels resulted in a significant percentage increase. Or maybe a lot of people are trying to get out from underneath homes, and the contractors are busy with pre-sale repairs. I have no idea. Who do you think I am, Bob the Builder? To exemplify how screwed up the state financial problem is we can go back to my state budget post about the state's ability to borrow $2 billion from local government (see here). When the Finance Director, Jennifer Hennessy, was questioned about this possibility she responded that the city could cover this "loan" with emergency funds. Chico would lose close to $1.2 million in property tax income to the state. The state would be required to pay the money back, with interest, within three years. So who pays the interest? Well, taxpayers do. Why would we pay the interest? So the shell game of using one credit card to pay off another can continue at the state level. Why are we doing that? Because the state has done the same thing the City of Chico has done. They've established spending habits that are completely out of touch with their revenue streams. And since these are mostly human resources costs, you won't find a lot of bureaucrats willing to take the hard-line cost cutting approach. Expect more taxes in the coming years. |
| A Growth Industry: Regardless
of sales tax income, my daughter appears to be on a projected path of
growth. She turns 2 today. There is a secret plot behind this blog. It's not to promote disc golf. That's my non-secret plot. The secret plot is to force Chicoans to view my family photos, since I can't have you all over for the weekly slide shows. Here's Ruby at 1 year Here she is at birth My goal is to keep this up until she's a teenager so I can maximize the parental embarrassment factor in her upbringing. The picture below was taken when we were pulling starthistle at Sherwood Forest. My son took the picture. It reminds me of that scene in the movie "The Jerk". All I need is my bottle. And this Klean Kanteen. And this camera. And... |
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Reductions and Growth
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Lon
About Me: Fasten your seatbelts for an exhilarating trip through Chico's public policy; I guarantee it's marginally better than public access TV.
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Happy Birthday Ruby. Welcome to the Terrible Two's. What an angel. Mine were too. God help you. No, he doesn't babysit, it's just a figure of speech.
I been trying to cut my budget but I've finally come to the throttling realization that there's nothing left to cut. I quit everything, cut down to cheap coffee, no more red meat, yadda yadda. I am going to have to find some way to raise revenues. At my age, it looks like I will have to embark on a life of crime, like Black Bart.
I can't beat people up on the bike path, I'm too afraid of the dark. I can't rob banks, because guns scare the hell out of me too. I need to find a crime that's not too dangerous or latenight, hmmmm...
I hear there's a lot of opportunities in the public sector. But that would be like trying to get your nose in a pig trough, that gets ugly!
I think I'll just go out to Palmetto and start shaking the kids down for their lunch money.
Juanita,
I'm not sure any kids pay for lunch anymore. It seems like a bunch get freebies. Our goal is to get Becket (and I assume Ruby) through elementary school without him ever paying for a lunch. That means if you come over into our neck of the woods and shake him down you'll get apple slices, a pastrami sandwich, ritz crackers, and vanilla flavored yogurt.
So if you're hungry...
I hear you on the budget cuts. We're not in the exact same boat, but any unexpected cost is fairly traumatic.
I drove my car a couple of weeks ago to take the kids to the park, and it started doing the chitti-chitti-bang-bang thing. Except none of us were singing.
I drove it home and pulled into the garage with steam blowing out of the radiator. I thought I cracked the block, blew a head gasket, or something similarly dreadful.
I lucked out and had some minor electrical problems that shut down 3 cyclinders. The cost to fix was $108. If it had been the motor I was ready to pull it and park it. Then I'd have to wait a year or so until I could pull together a few thousand dollars to rebuild the car.
We're holding our breath hoping that anything that pops up can be dealt with cheaply. What are the chances of that coming to pass?
Lon
Well, that's why I told you not to sell that car, see. Remember, it was my idea for you to own an older car, a car you could work on, easy to find parts, etc.
Meanwhile, you told me to buy this newer car that can't get out of the shop for less than a thousand bucks. Did you know, our car has it's own credit card? That's what I call it, cause every time I get it paid off something goes wrong with the GD car. Luckily, it is the same card I have held since I was 21 years old, and there's some respectability in a clean payment record.
Jennifer Hennessey once made this speech about living on borrowed money, and I'll be damned if she didn't convince me credit cards are okay. Especially if somebody else is making the payments. So, I set myself up as several shell companies, the "Me, Myself, and I.O.U." system. That way I can play the same shell game (thanks Mark S by the way) they play down at the city.
See, Me gets the bills, handing them directly to Myself, who passes them immediately off to I.O.U., who makes a partial payment and then turns the whole thing over to Next Month (the fourth member of my Shell Corporation). It's a great system as long as you pass quick, it's like that game, "spoons." Somehow, I always manage to come up with a spoon. So far so good.
Unfortunately, there's never enough money in the system to make loans, or I'd borrow it Myself. Myself has sticky fingers, I may have to charge her with embezzlement.
So when will you be able to work my old Chevy into your schedule? I can pay you in junk food and ipods.