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REGIONAL REPORT : Recession Taking a Toll on Government Services : Economy: Decline in revenues from sales tax and agency fees leaves cities and counties short of funds. Library, park and police agencies face cuts.

March 23, 1992|BARRY M. HORSTMAN | TIMES STAFF WRITER

Motorists in Costa Mesa could find themselves traveling down more dimly lit roads as city officials grapple with dark economic times and ponder turning off every other street light.

In Oxnard, patrons who attended the opening of a new library found it closed for business the next day. And in San Diego, park-goers or couples seeking marriage licenses may instead find "Closed for the Day" signs posted sporadically this spring.

With the economy mired in a prolonged recession not expected to ease soon, cities and counties throughout Southern California have seen tax revenues shrink dramatically this year, forcing some painful belt-tightening that is increasingly inconveniencing the public.

"Almost nothing is too big, too small or too strange to be ignored" when it comes to budget trimming, said Costa Mesa City Manager Allan Roeder of the suggested shut-off of every other street light, which would help make up $70,000 of the city's estimated $3.7-million budget shortfall.

Los Angeles has seen its monthly share of sales tax receipts from the State Board of Equalization drop from $29 million in February, 1991, to $26 million last month--a pattern duplicated in most cities throughout the state. Last month, San Diego received $9.5 million in sales tax revenue, compared with $10.8 million in February, 1991. And even Beverly Hills proved not to be recession-proof: Its sales tax revenue declined from $1.44 million to $1.26 million.

"Nobody thought it would be this bad for this long," said San Diego City Manager Jack McGrory, whose $1.1-billion budget recently was trimmed by about $25 million, largely because of the sales tax plunge.

Cutbacks in an array of municipal programs will eliminate some services and create strains in others areas, from recreation and culture to street-sweeping and license-processing--a list that could grow longer if the economic downturn persists.

"It may be a case of waiting longer to get less from City Hall," said San Diego City Councilwoman Valerie Stallings.

A number of recession-induced factors underlie local governments' budget woes--among them, cutbacks in state funding and limited growth in property taxes from sharp reductions in construction and home-buying.

Arguably the most damaging factor, though, has been the precipitous drop in sales tax revenue, which accounts for up to 40% of some cities' general operating budgets. Consumers' sharply curtailed spending, combined with the severe decline in construction, has caused sales tax receipts throughout Southern California to nose-dive, creating budget gaps reaching into tens of millions of dollars in some large cities.

In San Diego, sales tax revenues have plummeted to what McGrory describes as "Depression-era levels," while in Los Angeles, glum budget officials have watched sales tax receipts decline for two consecutive years for the first time since World War II.

Costa Mesa, meanwhile, has limped through 14 consecutive months in which retail sales have declined from the year before--an unprecedented trend especially burdensome to a city where annual double-digit increases in sales tax revenues were common in the 1980s.

When cities prepared their current budgets last summer, most economists predicted a moderate economic recovery for early 1992. Not only has that not occurred, but the steep decline in dollars from sales taxes, permits and other fees that began during 1991 has worsened this year, widening the gap between projected and actual revenue.

Beyond routine hiring freezes and service cutbacks, cities and counties also are exploring some unorthodox ways of reducing expenses or raising new revenue--like turning off alternate street lights on some major streets in Costa Mesa.

The Costa Mesa City Council has deferred action on the recommendation pending review of whether it could subject the city to greater legal liability. Motorists who have accidents or pedestrians who become victims of street crimes conceivably could argue in court that the dimmer lighting contributed to their mishaps.

"We want to make sure that we don't end up cutting electricity but increasing liability," Roeder said.

In San Diego County, officials' efforts to close a $30-million gap in their $1.9-billion budget could cause county residents to find parks, government offices and other facilities closed or unstaffed on selected days--probably Fridays--over the next three months.

For San Diegans applying for marriage licenses, registering property transfers or needing access to myriad other county offices, the periodic closures could be an annoyance that personalizes the bleak but dry budget statistics.

"It could inconvenience some people, but believe me, a $30-million budget deficit is a bigger inconvenience," said David Janssen, San Diego County's assistant chief administrative officer.

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