May 19, 2010: More Red Ink Forecast for Santa Clara City Budget - May 19, 2010

By Carolyn Schuk

Santa Clara's operating budget deficit for 2009-2010 will reach $15 million, the City Manager reported to the City Council on May 11. This is more than twice the deficit that was forecast when the budget was finalized in July 2009.

Santa Clara's operating budget has

gone from a surplus of nearly $8 million

in 2007-2008 to an alarming $20

million deficit forecast for 2010-2011. 

The increased deficit will exhaust the city's reserve fund. The City Manager's office currently forecasts an even larger – $20 million – deficit for 2010-2011. As a result, cuts in city programs and services are almost certain.

The deficit results from a combination of sharp declines in sales and hotel tax revenues in recent years and growing operating expenses as a result of new programs and increasing compensation costs over the last decade.

Besides hoping that things get better, there is one concrete thing residents can do to help the City's bottom line. "We are very much encouraging people to 'shop Santa Clara,'" says Deputy City Manager Carol McCarthy. "Have your friends stay in Santa Clara hotels when they come to visit."

To see the whole grim budget picture, visit santaclara.gov.