The numbers are in and they are bleak.
The city of Santa Barbara received $3.79 million in sales tax revenues during the quarter ended March 31, 2020 — which is 28 percent below the same quarter last year, largely because of the COVID-19 pandemic.
The sales tax budget for the fiscal year that ends June 30 is $23,773,382. Sales tax results for the June quarter will be available in August.
The numbers were worse for hotel bed taxes.
Santa Barbara collected approximately $500,000 and $110,000 in transient occupancy taxes for March and April of 2020, respectively. TOT revenues in March and April 2020 were 62 percent and 93 percent below March and April last year.
The drop in revenues has set the city’s projected budget revenues back.
The city collected approximately $13.9 million in hotel bed tax revenues through the first ten months of this fiscal year, which runs from July 1 through June 30. The city’s adopted bed tax revenue budget is $19,989,179.
“These numbers are exactly what the business community has been telling me to expect and it shouldn’t have been a surprise to anyone, especially the city,” said Alejandra Gutierrez, a city councilwoman and member of the city’s Finance Committee. “We have a real financial crisis on our hands and my worry is that we, the city, are not doing enough or doing it fast enough to help the community. My goal is to help streamline business in any legal way possible.”
She said the city needs to help businesses fill out government forms, ask the top-tiered city employees to take a pay cut, and streamline the permit process.
“We no longer can continue to conduct business the way we always have,” Gutierrez said.
Eric Friedman, chair of the city’s Finance Committee said the drop in sales and hotel bed taxes, and the estimated $30 million deficit in the general fund, poses a significant challenge.
He said it would “require the use of reserves, strategic spending reductions, labor negotiations and holding vacant positions open.”
“These collective measures will enable us to meet this unprecedented challenge while still providing essential services,” Friedman said. “In addition, we are coordinating with neighboring jurisdictions and the League of Cities to advocate for federal and state assistance for smaller local communities such as ours. It is also critical that we responsibly reopen our economy and allow people back to work while enacting proper public health protocols.”
Tom Patton, general manager and partner of Ramada Santa Barbara, said hotels are seeing slow gains, but week over week increases.
“Leisure travel is still not permitted under the current state regulations,” said Patton, a board member of Hospitality Santa Barbara. “We are hoping to see this restriction removed within the next few weeks. At that point both Visit Santa Barbara and Visit California will begin a digital marketing campaign designed to encourage both in-state and regional visitation by those guests that will be traveling by car.”
Patton said even though the situation is challenging, there are positive signs.
“We are hopeful that we can salvage the summer travel season while still ensuring the health and safety of our guests, employees and community,” Patton said. “We are appreciative of all the efforts both city and county staff and elected officials are making in an attempt to help the hospitality industry get back on its feet.”