Sacramento city officials are projecting a $90 million drop in revenue through June 2021 as a result of the coronavirus. That includes a $30 million drop this fiscal year and another $60 million next year, City Manager Howard Chan told the Sacramento Bee.
How will the city respond?
Sacramento has already halted new hires for non-essential positions. Suspension of capital projects may also be in the works and a planned 30-year bond has been tabled.
The city is entitled to $88.9 million from the federal Coronavirus Relief Fund. However, according to the Legislative Analyst’s Office, those funds “can be used for direct—and potentially indirect—state costs associated with the pandemic, but not revenue losses.”
Mayor Darrell Steinberg hopes to use the stimulus for housing and redevelopment projects, the Aggie Square project at UC Davis Medical Center, tourism, and workforce development training. The City Council will have to approve those plans. A consulting firm has submitted more cost saving ideas to the city, which you can read here.
Despite the city’s budget woes, Mayor Darrell Steinberg has been sanguine. Thanks to the prior passage of a half-cent sales tax measure (Measure U), the city was left with some $33 million in surplus money. Combined with $55 million in the rainy day fund, that will prevent drastic measures like public safety cuts for now.
The city’s next steps will become clearer once Chan submits his balanced budget proposal, which is due by May 1. The council is expected to lend its approval by mid-June.
Read more at the Sacramento Bee.