Sunday, June 19, 2016 – 12:00 a.m.
The economy is supposed to be doing just fine. Property taxes have all but fully recovered along with real estate prices.
But Inland Empire governments are expressing caution when discussing their finances.
Riverside County is using reserves to plug a $60 million budget hole, while many of its cities are struggling to pay for contract law enforcement and fire protection.
The city of Riverside even has a $10 million financial hole.
Neighboring San Bernardino County continues to build budget reserves. But several cities are expressing caution.
The cities of Highland, Colton, Loma Linda, Redlands among others say they are walking a budget tightrope with an unknown future, while the San Bernardino situation is well-known to say the least.
Several San Bernardino County municipalities, which contract with the San Bernardino County Sheriff’s Department for law enforcement services, are worried about escalating costs.
Some High-Desert cities are even exploring the formation of a metropolitan police department. But that venture would likely prove way too costly in the long-run.
So what gives with all the gloom?
To be blunt. The cost of providing basic services is outpacing the growth in tax revenue and the long-awaited robust recovery never actually materialized.
The California Legislature has already starting to pass taxes and fees to increase revenue. An example of this is the new $10 per vehicle increase in the annual vehicle license fee (VLF). The new fee revenue will go to support the budgets of the California Highway Patrol (CHP) and Department of Motor Vehicles (DMV).
In Colton, voters just approved the transfer of funds from the city’s electric utility to its general fund in order to help pay for operations.
The strain on city budgets is visible everywhere. Broken street lights and potholes are on full display. Wealthier cities like Palm Springs, Rancho Mirage, Rancho Cucamonga, Chino Hills and Ontario are more able to maintain their infrastructure, compared to the older cities and bedroom communities.
One has to wonder what is going to happen when another recession hits, and revenues decline?
One thing is for certain. It won’t be pretty.