Effects of the terrorist attacks in September 2001 and an impending war against Iraq have many people holding their wallets close to their pockets. The sluggish economy is felt nationwide and Santa Monica is no exception.
The City of Santa Monica is facing an $8.2 million budget deficit this year and a $16 million deficit next year as a result of decreased sales taxes. Those numbers are expected to get worse as the economy slowly climbs back and the state continues to take away city funding by not reimbursing property, sales and vehicle license taxes to deal with its own $30 billion deficit. More than $20 million in local capital improvements have been cut and budgets have been slashed in each department in City Hall.
Sales taxes in the city’s business districts continue to wane, with many small operations facing serious financial consequences through either lay-offs or shutting their doors permanently. Consumer confidence is slowly starting to climb back up and Santa Monica business owners are waiting to see how much damage has been done.
Originally published in the Santa Monica Daily Press print edition on December 31, 2002. Read the original PDF.