Newport expects to weather budget woes

June Casagrande

NEWPORT BEACH -- The bad news is, it’s going to be a lean year. The

good news is, it looks like the city won’t have to make any cutbacks.

City staff have just finished putting together the city’s

$142.1-million budget for the 2002-03 fiscal year. Council members will

publicly scrutinize the detailed spending plan in a study session before

their May 28 meeting.

And one of the first things they’re likely to notice is that Newport

Coast will be a saving grace. The nearly $5 million in property taxes

expected from the recently annexed Newport Coast will offset big losses

in hotel and sales taxes that are part of a nationwide economic slump.

“This is what we call a status quo budget,” said Dennis Danner,

administrative services director for the city. “There are no new

programs, and only one recommended new hire that I know of.”

The 2001-02 budget was $136 million, a nearly $10-million increase

from the previous fiscal year. By comparison, the coming year’s budget

reflects a serious economic slowdown.

The city’s fund for new programs will bear the bulk of the burden.

Last year, the city had about $5 million set aside for projects such as

the Balboa Village Improvement Plan now underway. Next fiscal year, which

will begin June 31, will have only $4 million for such projects.

The transient occupancy tax, or hotel tax, brought in $8.8 million to

the city in the 2000-01 budget year and $7.8 million in 2001-02. This

year, a partial recovery is predicted, bringing it to about $8.3 million.

Property taxes in 2000-01 were $24.7 million; the next year’s $29.3

million included a $2.3 million boost from Newport Coast, where property

taxes were collected by the city for six months of that year. The coming

year will see that amount from Newport Coast roughly double, bringing

total property tax revenue citywide to about $32.6 million.

Besides the economic slowdown and its effect on tourism and commerce,

state budget woes have also hit home. Despite the governor’s statement

that he won’t take from cities vehicle license fees they receive each

year, Newport Beach officials aren’t taking any chances. The budget

excludes the $2.7 million that the city could usually count on from the

state.

“We thought it was best to be conservative on this point,” Danner

said.

The City Council will hold a budget hearing at its June 11 meeting.

The budget must be adopted June 25.

* June Casagrande covers Newport Beach. She may be reached at (949)

574-4232 or by e-mail at o7 june.casagrande@latimes.comf7 .