After dire warnings of multi-year shortfalls just last year, City Hall has released a new budget that projected no deficits in coming years.
The City of Santa Monica has released its proposed Biennial Budget for Fiscal Years 2021-23, and Interim City Manager Lane Dilg said Santa Monica’s long-term goals are still attainable due to a combination of budget cuts and rebounding revenue streams.
Last year, in the midst of historic volatility and the economic devastation brought on by the pandemic, staff’s forecast detailed an annual General Fund deficit of $48 million, $102 million and $74 million over the coming years. The proposed budget released Monday reflects no deficit — either now or in the associated five-year forecast.
“The City also retains its rare AAA bond rating from all three national credit ratings agencies; its broad community partnerships; its dedicated and talented municipal workforce; and, of course, its envy-invoking location on the Pacific. Such key assets secure Santa Monica’s full recovery and bright future ahead,” Dilg said, noting the FY 2021-22 General Fund budget is $349.5 million, almost $100 million less than the FY 2018-19 General Fund, so the Biennial Budget is not similar to ones seen in prior years of abundance.
“This decrease reflects not the strength of our local economy but the very nature of it,” Dilg said. “During the pandemic, we have seen changes to the way we live and work. As people have engaged in less retail shopping, less business travel, and less office work in key entertainment and technology sectors, City revenue streams across tourism occupancy tax, sales tax, and parking have been diminished.”
Despite its reduced footprint, the FY 2021-23 Biennial Budget supports a first-class local government capable of meeting essential community needs and providing a solid foundation for regrowth, Dilg added, acknowledging there may be a disconnect will remain between City resources, which have been reduced as a result of the pandemic, and community expectations, which have not.
Still, city leaders believe revenue streams will replenish thanks to stimulus from the federal government and the new revenue sources and partnership opportunities now available to the city, including the recently adopted Measure SM, the SaMo Small Business Recovery Grant Program and the City’s new We Are Santa Monica Fund.
“The FY 2021-23 budget recognizes our interconnectedness as a community,” Dilg summarized. “As we recover from the pandemic, we seek rebirth as a more equitable, more inclusive community, with an economic recovery that lives up to our values by keeping our most vulnerable residents in their homes, supporting development of affordable housing to invite others to join us, celebrating our local artists, preserving our small businesses, and bolstering commercial districts that speak with authenticity from and of the passions of our neighborhoods. These goals, while ambitious, remain achievable in Santa Monica.”
City Council is set to discuss the Proposed Budget during study sessions on May 25 and 26. Residents are free to scope out the details themselves ahead of the discussion and expected adoption on June 22 by visiting https://finance.smgov.net/Media/Default/annual-reports/FYE2022/FY_2021_2023_Proposed_Biennial_Budget_Digital_Final.pdf.
Brennon@smdp.com
