Even the tax man brings recession gloom
| Tuesday, Aug 25 2009 06:04 PM
Last Updated Tuesday, Aug 25 2009 06:05 PM
Local August payment reductions for estimated sales tax revenues
Arvin: $6,500: reduction; $52,000: payment
California City: $2,570: reduction; $20,500: payment
Delano: $26,100: reduction; $208,900: payment
Maricopa: $2,700: reduction; $0: payment
McFarland: $1,860: reduction; $14,900: payment
Ridgecrest: $20,930: reduction; $167,500: payment
Tehachapi: $10,760: reduction; $86,100: payment
Numbers rounded. Source: State Board of Equalization
Some cities around Kern County are being reminded the recession's impacts aren't over.
They're among nearly 340 cities, counties and other jurisdictions in California getting a smaller check than expected from state tax officials in August. Poor retail sales in some areas prompted the cuts.
It's not a huge hit -- for most, 4 percent lower than slated -- but the monthly payments from the state Board of Equalization nevertheless provide steady cash in tough times.
Cities and counties "depend on these revenues for day-to-day operations," said Anita Gore, spokeswoman for the equalization board.
The extra tweak comes on top of a 14.4 percent cut, compared to a year earlier, already figured into second-quarter payments.
Arvin, California City, Delano, McFarland, Ridgecrest and Tehachapi all received letters about the extra 4 percent snip.
Maricopa, meanwhile, is among 15 cities getting no August payment at all. The city of roughly 1,100 in southwestern Kern was anticipating a $2,700 check.
Alan Christensen, Arvin's city manager, said the $6,500 reduction isn't a short-term problem. Still, officials are "sick and tired of being nickled and dimed" by the state, he said. The city's August payment will total $52,000 after the cut.
Hannah Chung, finance director for the city of Tehachapi, said August's reduction is painful. The city also had cuts during a previous round in May
"The $10,000 (cut), we can live through," Chung said of the latest monthly hit. "I'm more worried about the future."
This is the first year the Board of Equalization has made such widespread downward adjustments. In May, it sent 460 letters announcing payment reductions of 7 percent. California City, Maricopa, McFarland, Tehachapi and Wasco all got one.
An "unprecedented drop-off" in taxable sales has prompted the effort, a board statement says.
Sales taxes collected during a retail transaction go to the state and are later disbursed to cities and counties according to a formula. The monthly payments are "advances" based in part on historic sales levels for that area.
The board had already planned to pay 14.4 percent less during the second quarter. But actual receipts came in even lower -- closer to 19 percent down.
The additional 4 percent cut was applied to places where sales fell 21.4 percent or more during the first quarter compared to the previous year.
Neither the city of Bakersfield nor Kern County have so far been subject to the extra reductions.
Tax officials say further adjustments are likely in the third and fourth quarter of 2009.
