Watsonville, CA Facing $3.7 million Budget Gap; Layoffs Possible

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The City of Watsonville, CA is considering budget cuts, new taxes, and layoffs as potential ways to compensate for their expected $3.7 million gap in the budget.

Accroding to Finance Director, Marc Pimental, a new tax will surely not be enough to cover the gap.

“It’s bigger than a revenue measure,” he said. “Layoffs are possible. Furloughs are possible. And there could be brown-out days where certain services are not available.”

According to officials, the problems are stemming from declining property values and decreased revenue from sales tax, which dropped 7.6 percent during the ’07-’08 fiscal year. This year, as well as next year, sales tax revenue is expected to fall more than 6 percent which will create a loss of around $1.2 million for three years.

According to Pimental, immediate cuts won’t be necessary due to the city’s reduced general fund spending more than $2 million, which kept the deficit from growing too large.

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