Tax Revenue Not Enough for Murrieta City Budget

Murrieta City Council members were asked Tuesday to approve $1.03 million in reductions to its projected revenue of $32.9 million for the 2011-2012 fiscal year.

Sales and property tax revenues were up in Murrieta the first part of 2012, but the city is still expecting a $1 million hit to its projections.

Murrieta City Council members were asked Tuesday to approve $1.03 million in reductions to its projected revenue of $32.9 million for the 2011-2012 fiscal year.

City staff had forecast 2011-2012 would be the beginning of an upswing after the housing market crash of 2007-2008, said Joy Canfield, city finance director, as she presented a midyear report.

Sales tax revenue was up 4.2 percent in the first half of the year at $2.8 million, and property tax revenue was up 6.3 percent at $1.8 million, according to the report.

Despite that, the city has taken other hits, she said.

"Since then a number of things that have happened have had a negative impact on our revenues," Canfield said, referring to state actions taken after the budget was adopted and the continued weakness of the housing market.

One such action decried by city officials was the transfer of vehicle license fee revenue from cities to the state's coffers under Senate Bill 89. The city stands to lose $350,000 annually due to the bill, according to city documents. It has lost $248,322 during the current fiscal year.

"It is constitutionally guaranteed to cities," said Mayor Doug McAllister, about the transfer of vehicle license fees. "That means it is safe...but in California it is not...This did not come as a result of imprudence or of being fiscally irresponsible...this came simply because the State of California can’t get their acts together."

The city will also lose $500,000 in interest revenue, which Canfield said is because of federal interest rate levels.

As for the increase seen so far in property tax revenue, Canfield said it was due to more timely payments from homeowners.

Fire department revenue was up 4.6 percent in the first half of the year, which Canfield also attributed to the increase in timely property tax payments. Two grants received by the department were also figured in.

However, actions by the state and decreases in interest rates are counteracting the tax gains, according to Canfield.

Additionally, she said the city has been billed $111,848 in sales tax due to erroneous reporting by a business.

"We thought that was one of our bright spots and then we got a notice that we were going to be getting a negative adjustment," she said.

The Library could present a source of worry, as revenue was down 3.7 percent. Budget actions taken by the state resulted in a loss of $92,496. A donation of $8,750 from the Friends of the Murrieta Library still needs to be figured in, according to Canfield.

Expenditure adjustments of $711,431 have been made citywide to accommodate the overall loss of revenue, Canfield said.

The city is expected to take another look at its financial status at the end of the third fiscal quarter, and may need to make further adjustments, she said.

In a closed session meeting prior to the start of Tuesday's regular meeting, city management and City Council members discussed the possibility of negotiations with its labor unions.

Rob March 22, 2012 at 02:02 AM
when near 37% of your staff earn over a $100K/year you have to screw the community. You know why the thieves in the city work so close to the cops.... they need the protection, and birds of a feather flock together. Last chief earned 250K in his last year, sured for severence and has a pension over $130K/year. This chief "bypassed a raise" and is earning near $200K, so are the #2 and #3. The city librarian earns over a 100K. the lady who schedules the meetins and takes notes eanrs 100K...... PAY UP MORONS! ... and by morons I mean the people who live in Murrieta. ... which is one small notch below the City of Bell.
City and Gov workers ARE the 1% March 23, 2012 at 06:10 AM
Rob, you are SO right! Have you seen the very high end cars in the city parking lot? Watch them leave work as they speed off, with no regard to the laws. I could go on and on, but you summed it up, perfectly.


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