$134 MILLION BUDGET LEAVES CUPBOARD BARE FOR NEXT YEAR.
San Leandro is placing a big bet the economy shows signs of life in the next year by approving Monday night a $134 million city-wide budget. The adoption of the budget did not go on without a hitch, though, as two councilwomen threw the council for a loop by voting against the proposal after contemplating the possibility of tougher budget cuts in the next year.
Vice Mayor Joyce Starosciak elicited a few raised eyebrows from the normally congenial council when she read a three-page statement calling for more equitable cuts than the proposed budget contained. “I had been quietly supporting the consensus,” said Starosciak, “There were specific things that should have been done in this budget and I wanted to make my last statement about that and it was contrary to what they expected.”
In her statement, Starosciak urged for making the tough decisions now rather than later. “A balanced budget in this economy requires a firm stand and an effort to communicate our dire situation to our citizens. Next year, with no remaining reserve, it will be much, much worse and we must start communicating that message.”
Councilwoman Diana Souza, who also voted against the budget, agreed and said we are “setting ourselves up for a shock next year.”
As Starosciak read her statement, both Mayor Tony Santos and Councilman Jim Prola appeared shocked at the vice mayor’s reversal of support. Prola called it an “attack” on the finance committee. “You know, we’re a family and we choose to have our disagreements,” said Starosciak.
A breakdown of the budget indicates a presumption that President Barack Obama’s Federal stimulus money will recharge the nation’s economy by estimating increases in property and sales tax and the recent voter-approved utility and communication taxes.
- Property taxes are estimated to rise 3 percent or $455,000.
- Sales taxes are estimated to rise 4 percent or $800,000.
- Utility tax is estimated to rise 2 percent or $200,000.
- 911-communication tax will add $700,000 based on historical increases.
Finance Director Perry Carter said an increase in property taxes is based on the housing market stabilizing. The jury is still out on whether the home buyers are keen on taking advantage of record-low mortgage rates just yet, although, recent reports indicate higher end homes are rebounding in the Bay Area. Overall, this is not likely to be the last word on the budget within the next year or two.
The city could find itself in dire straits in a year if the Federal stimulus fails to do anything other than merely stabilize the economy. Without a reserve fund or the ability to trigger insurance funds, San Leandro could be faced with even larger cuts in services. Residents have already voiced strong opinion over closing libraries and keeping swimming pools from the budget ax. According to Starosciak, part of her concern stems from a belief the city council has failed to prepare the public for a grim future.
“I find communication about hard situations makes them less difficult,” said Starosciak, “You have a choice. You can take an easy way or you can take the hard way and communicate that.”