Smyth says city budget will “take a hit” due to COVID-19, but remains hopeful,

With an extended “Safer at Home” order and most workplaces still closed due to the coronavirus pandemic, Santa Clarita’s sales tax revenue will suffer. Just how much is part of the financial projection the city is working on, Mayor Cameron Smyth said Monday.

“No doubt, we’re going to take a hit just like every other public agency,” he said during a Zoom meeting with the Valley Industry Association. “The question is as to what extent. I know that our city manager and staff have been going over projections. I think it’s safe to assume that we will probably adopt a hold-the-line budget for this fiscal year.”

In February, the city had commenced its six-month budget process for the fiscal year 2020-21, and City Manager Ken Striplin said during a study session that Santa Clarita is “very well-positioned” to remain a strong economy should another recession occur in the coming years.

A preliminary look into the new budget in February showed revenues were expected to reach $114.1 million — the same as the 2019-20 budget — and sales tax to reach $37 million. Expenditures were proposed at $113.8 million, an increase from $113.6 million for the current budget, and public safety would continue as the largest general fund item at $28.6 million. Santa Clarita has an operating reserve of $17.6 million for the 2019-20 year.

Those figures are expected to change with a drop in normal consumer activity. Local workers are also among the 2.7 million Californians who filed for unemployment benefits in the last month as Santa Clarita and the rest of the state enter its onemonth mark since the safer-at-home order was established and now extended through May 15.

The city would “probably put on hold” what hasn’t already been funded, such as construction projects like the new Santa Clarita Valley Sheriff’s Station, the Canyon Country Community Center and Fire Station 104 at Golden Valley Road and Newhall Ranch Road, said Smyth.

“But in terms of expanding any new programs, any new revenue, we’re going to have to reevaluate that and probably put much of that on hold,” he added.

Prioritizing is at the forefront of many local governments affected by the COVID-19 crisis, including Los Angeles County, which has projected a loss of more than $2 billion in sales tax revenue through 2021. Smyth was hopeful, however.

“In previous years when we’ve had significant recessions, the city has been able to withstand much of that and not see a decline in services to the residents,” Smyth said, “and I expect that we will do the same with this.”

The city expects to have a clearer projection of its budget by the end of April, said Smyth.