City financial situation improving

Based on the city’s draft 2017-18 budget, the financial stability of the city has improved immensely over the past few years, but remaining frugal is key.

The city council is expected to finalize the city’s $26.6 million general fund budget later this month. The spending plan is up, some based on what the city wants to accomplish, and some increases beyond the city’s control.

It is still a deficit budget, something the city has dealt with for a few years now. Only because department heads have done a good job of spending less than they are budgeted, has the city managed a deficit budget and not had to dip into reserves. That will be the case again this year.

City officials, as most in the state, are concerned there could be a downturn in the state economy in the next year or two. Gov. Jerry Brown has warned of such a mini recession, saying California has a recession about every seven years and the next one is due. No one expects the downtown of 2008 when the bottom fell out of the national and state economies. That resulted in a huge drop in both federal and state funds, especially state money which was diverted from cities and counties to shore up the state’s budget.

And, based on the current state Legislature, spending continues to escalate in Sacramento. What the state does over the next six months could impact the economy, or make an economic downtown worse.

We are talking about plans to more than triple the cap and trade program which could push fuel prices to levels not seen in years — as much as a dollar a gallon increase. We are also talking about the single-payer health plan being ramrodded through the Legislature by Democrats which could mean not only a huge increase in taxes — both sales and personal — but reduce the level of health care many people in this state now enjoy. In his budget message, City Manager John Lollis cautioned the city council as to what that proposal might mean to both the city and its employees who would lose their health plan and have to be part of the singlepayer coverage like everyone else.

For now, the city appears to be on pretty solid ground and we hope the council can see its way to accomplish some long-time goals, such as finally constructing an animal shelter in town. That has long been sought and there appears to be good support for the facility which would replace the current shelter north of Lindsay.

And, with Greenpower Motor Company finally beginning operations here, the city should experience some positive growth, but until that deficit is covered, the city needs to continue to manage its finances as if that recession is just around the corner.