Santa Maria facing $21 million budget deficit
October 4, 2024
By KAREN VELIE
With costs outpacing revenues, Santa Maria is struggling with a $21 million budget deficit. The city is considering raising taxes and cutting expenditures.
The primary cost driver is increased salary and benefits for city staff, according to a staff report. At the same time, both sales tax and occupancy tax revenues are under performing budget expectations.
The city is considering several fee and tax raising options to increase revenue, including raising the sales tax by a half cent, raising the transient occupancy tax from 10% to 14%, raising taxes on businesses and allowing pot shops in order to enact a cannabis tax.
As an alternative to raising taxes and fees, Santa Maria is contemplating ordering city staff to cut costs.
City staff presented the options to the Santa Maria City Council during its Oct. 1 meeting. The council directed staff to continue analyzing the options with direction to bring their suggestions back to the council in Feb. 2025.
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