Carson City Council Passes its Budget – How Healthy Are the City’s Finances?
On June 19 the Carson City Council adopted a nearly $89 million budget for the upcoming fiscal year starting July 1. This is larger than the city’s 2017 budget of $79 million, and like last year and many prior years, reflects an ongoing deficit for the city. Overall, the city’s budget is roughly 40% higher than it was a decade ago.
In 2017 the City Council declared a “fiscal emergency” and shortly thereafter renewed its expired Utility Users Tax, which was passed as Measure C in November of last year.
This year the final city budget was $88.8 million. The city allowed for the addition of three new sheriff service units, as well as other new employees and some raises for city staff. The budget proposed and adopted on June 19 still reflected a deficit of more than $2.4 million dollars, as reported by City Manager Ken Farfsing.
This year will make it nine out of 12 years that the city has run a deficit, and city reserves continue to dwindle.
According to the city’s own five year projection, they will be out of money by 2022. Discussion by the council at its June 19 meeting suggested the city may consider another declaration of “fiscal emergency” in the near future.
What Does the Future Hold for Carson’s Finances?
As stated in the 2017 Comprehensive Annual Financial Report (CAFR), “Even though the City’s revenues continue to be stable overall, the City’s costs are increasing faster than its revenues. Employee retirement costs, the City’s contract with the Los Angeles County Sheriff’s Department, and litigation costs are the primary drivers of this trend. In the future,
either the City will have to decrease its service level to the community, or the City will have to secure new revenue sources.” That report goes on to detail that The City’s employer contribution to the California Public Employee Retirement System (CalPERS) is expected to increase by more than $1 million annually for the next five years. Retiree health benefits are another mounting cost.
As noted above, the deficit budgets passed over the last decade have drained the city’s budget coffers and, combined with increasing expenses, mean more difficult decisions lay ahead.
What Does the City Pay for? Why Does its Budget Matter Versus Congress or the State of California?
City government is often referred to as “where the rubber meets the road” for critical public services like public safety, streets and roads and other services like parks and community services.
Government financing can be complicated, but knowing “who pays for what” can make city residents powerful advocates for things they care about. As an example, the City does not
fund schools, but it does fund a wide range of youth activities and sets the registration fees for them.
Broadly the City does not fund healthcare services, but in Carson one important healthrelated item is the City’s Stroke Center. This is funded by the City and has been the subject of budget cuts and fee hikes in recent years.