Residents want more arts funding in budget
CITYWIDE — Stormy years could lie ahead in City Hall’s financial future as Santa Monica, much like the rest of the country, might have to weather a recession.
The bleak financial forecast was presented to the City Council on Tuesday night during a comprehensive budget discussion that included a five-year outlook and the formulation of community priorities for the upcoming fiscal year.
“The economy continues to be uncertain, although we’re seeing a stronger indication and more prediction that we will in fact hit recessionary conditions this year,” Carol Swindell, director of finance for City Hall, said at the meeting.
Affecting the financial picture of the city is recent downward trends in several tax revenue sources, including auto sales, which account for 20 percent of the total sales tax. During the quarter ending in September 2007, auto sales tax dropped 12.7 percent from the same quarter the previous year. Local sales are indicative of national auto trends, which in 2007, experienced the weakest year in 10 years. Experts predict 2008 will be a weak year as well, Swindell said.
Thanks to the diversified tax base, some of the other tax sources that have experienced growth, such as the transient occupancy tax and business gross receipts, will be able to absorb the loss in auto sales, Swindell said.
The finance director added that consumer spending could take a hit.
“Certainly, consumer spending is beginning to wane,” Swindell said. “Consumer spending accounts for almost 70 percent of the gross domestic product, so any weakness in consumer spending can have a big impact on the economy, both here and nationally.”
Swindell presented three different five-year outlooks for the budget — the worst case scenario in which the recession would have a severe impact on revenue streams and widen the deficit to $32.6 million in the 2012-13 fiscal year; the best case scenario where City Hall would basically be immune to the economic downturn and the general fund would not have a gaping hole; and the baseline projection which shows a deficit of $16.4 million by 2012.
Considered to be the most likely of the three, the baseline scenario takes into account a loss of approximately $1 million in sales tax revenue from the Santa Monica Place renovation, and a 4 percent increase in labor costs. But the scenario also includes revenue from two new hotels and the maintenance of the utility user tax for telecommunication services, keeping that revenue stream alive, Swindell said.
The five-year projections are meant to set the stage for the formulation of the upcoming budget, giving city officials a framework from which to base spending.
But in order to form a budget, city officials first needed to know what the community wanted in terms of spending.
“I urge you to not only continue your funding, but increase funding to the arts in Santa Monica,” Karen Goodman, a member of the Powerhouse Theater in Ocean Park, said.“Support the arts organizations that are driving and existing in Santa Monica.”
Increasing financial support to the arts community seemed to be the theme among many of the speakers that presented their wish lists at the meeting, many asking the council to honor its recent support of the cultural arts report, which outlines current and suggested new grants.
One of the new funding options suggested in the report is grants for individual artists.
“It’s very important to keep the arts here in Santa Monica because the practice of art is a vital element in maintaining a healthy (cultural) community,” Emma-Louis Thomas, a professor at UCLA, said.
Councilmember Bob Holbrook said he found it troubling to provide grants to individual artists, noting that it’s not the only profession in which people struggle financially. The list includes the clergy, writers, actresses and singers, he said.
“We’re identifying just one kind of person,” Holbrook said.
Aside from upping funding for the arts, residents also expressed desire to see money be spent toward the development of safer bike lanes, a bigger city planning staff, early childhood development programs and even a metal detector, which one speaker said was necessary after several City Councilmembers were killed during a meeting in a Missouri town last week. The safety enhancement wasn’t an idea that councilmembers necessarily dismissed.
Several residents also spoke about funding toward the “greening” of Ocean Park Boulevard, west of Lincoln Boulevard. City Hall recently hired a consultant to further examine the project, which would make the boulevard a more pedestrian and friendly street.
“It’s a project our city needs to take on,” Recreation and Parks Commissioner Lori Nafshun said, adding the commission has studied the green streets concept. “Ocean Park Boulevard is a great blank slate to start this project.”
Several of the councilmembers remarked that they were surprised homelessness was not mentioned as a budget priority,noting that it’s one of the biggest issues facing the city.
“I know we all feel strongly this is an extremely, if not the most important, issue facing the city,” Councilmember Bobby Shriver said.
Mayor Pro Tem Richard Bloom said that if an initiative, which would limit commercial development, is placed on the November ballot, City Hall might want to expend some resources to study the ballot measure.
Bloom also expressed that one of the biggest priorities will be to ensure the update of the Land Use and Circulation Element (LUCE) is completed. LUCE will dictate development in the city for 20 years or more.
“It’s extraordinarily important to put as much effort... to get the LUCE process completed,” Bloom said.
Originally published in the Santa Monica Daily Press print edition on February 21, 2008. Read the original PDF.