The COVID-19 pandemic has devastated economies across the nation and resulted in dramatic budgetary shortfalls to cities, counties and states. The City of Carpinteria, like most municipalities, is facing reduced revenues for the current and upcoming fiscal years. Still, thanks to strong reserves and spending reductions, the City has been able to provide funding for direct assistance in response to the pandemic and has approved a 2020/2021 budget that supports existing service levels and important projects and programs in the coming year.
As the community has struggled with the unprecedented challenge of indefinite business closures and significant wage losses, the City Council has dedicated substantial resources to assisting residents and businesses throughout the pandemic. The City has supported food distribution and public health, contributed to local nonprofits providing community support in the pandemic, and assisted businesses with pandemic safety costs, among other activities.
Meanwhile, two of the City’s biggest revenue sources, sales tax and bed (hotel) tax, have suffered steep losses in the pandemic. Though the severity and length of the pandemic’s economic impact remains unknown, the City anticipates $1 million in losses to 2019/2020 revenues and a reduction of nearly $1 million for the coming year as well. The General Fund, which is the City’s main source of operating expenses, is expected to receive $9.3 million in the coming fiscal year, a reduction of nearly 10 percent from the 2019/2020 estimates.
In response to these reduced revenues, cost-saving measures have been implemented this year and will continue in the 2020/21 fiscal year. Efforts to reduce expenses include a hiring and salary freeze for City employees and a deferral of work that is not time sensitive.
“Although there is a lot that we cannot know about how the impacts of the pandemic will affect City finances in the near and long-term, we do know that the City starts in a solid financial position with strong reserves and conservative spending,” stated City Manager Dave Durflinger. “This should help immensely in weathering the storm and continuing to deliver the services that are needed and expected by the Carpinteria community.”
The draft 2020/2021 budget was approved by the City Council at its meeting on Monday, June 22. Councilmembers thanked City staff for their diligent work on creating a budget that meets the City priorities and community needs despite the dramatic reduction in revenues. The budget can be reviewed at https://bit.ly/3hNPOYu.