SOUNDING OFF:

Costa Mesa is facing a potential budget deficit of about $3 million. Needless to say we are experiencing unprecedented economic times and the impact of our recession will be felt even as we move well into 2009. Our deficit has been impacted mainly by the loss in tax revenue due to a 21% decline in auto sales.

In times like these there is a need for our City Council to be more vigilant when making decisions that impact our budget. The city staff is doing an excellent job managing our city and being fiscally responsible. ?

The city has made recommendations that were not approved by the council and in turn we lost an opportunity to generate additional revenue which could have not only offset the current $3 million deficit, but could have also given us millions to ensure a healthy budget, which would keep us on task to fight gangs, crime and continue to improve our infrastructure.

One recent recommendation was to approve an increase in our Transient Occupancy Tax (a tax on visitors which does not impact the residents of Costa Mesa), which has not been raised in many years. There are only six cities in California that are at or lower than where we are, which include Maywood, Holt, Exeter (where’s that?) and three other cities that as you can see are not destination cities like Costa Mesa.

Our City Council was asked to put this on the upcoming ballot in November for the voters to decide, but it was overturned. For every 1% increase in the TOT the revenue would increase by $1 million. We are almost 12% behind Anaheim and we could have easily suggested a 4% increase, which would have added $4 million.

The City Council also turned down a recommendation to increase our Business License Tax. Our current cap is $200. To put this in perspective, a major department store in Main Place (Orange) pays more than $1 million for its business license tax based on its gross sales but the same store in South Coast Plaza, which is one of the highest volume stores in that chain, pays a total of $200. Think of the revenue we are missing out on that would have a positive impact on our budget. With proper planning our City Council should have proposed a compromised plan with a gradual increase using a bracket tax like other cities which would have at least got us moving in the right direction.

The bottom line is if our City Council would have planned better and been more receptive to the direction of our city staff, our current situation would have a much brighter outlook versus the road we are traveling down today.

BILL SNEEN is running for a seat on the Costa Mesa City Council.