On June 6, 2006, the voters of National City approved Proposition D, a District Sales Tax increase of 1%, raising the sales tax rate in the City from 7.75% to 8.75%. The need for this tax increase was based on a few temporary changes to the City’s revenue. The first was rising General Fund expenditures that began in 2004, the second was a decrease in Sales Tax revenues due to the onset of the “Great Recession”, and the third was the State of California reducing aid to local governments to address its own revenue shortfalls.
Facing the sunset of Proposition D in 2016, National City requires solutions to mitigate a potential revenue deficit. This report assesses the options available to National City to address this situation. Though the problem is of a very specific and definite nature, the solutions possible are disperse and many times mutually compatible with other solutions. With any budgetary solvency issues, there are multiple methods to correct imbalances. This report is divided into groups of recommendations that provide a broad range of possible actions the City can take to correct potential revenue shortages.
The solutions presented in this document can be viewed as increasing revenues, decreasing expenditures, or a combination of both. However, solutions are segregated further into four groups: Revenue, Expenditure, Administration, and Community Improvement.
The Revenue group contains recommendations related to the direct replacement of the revenues provided by Proposition D. The principle concept in this category of solutions is that the City has a structural revenue problem. These solutions involve measures aimed to directly increase General Fund revenues. The recommendations to accomplish this goal include establishing a Community Financing District, working with other local governments to revive Redevelopment Agencies and Enterprise Zones, and to increase community events.
The Expenditure group contains recommendations related to reducing the City’s budgetary costs. These recommendations consider the possibility that the City’s budgetary solvency problem can be assuaged by reducing costs. The solutions presented to accomplish this goal are to reduce current staffing levels, to encourage sustainability, to contract out services that the private sector can deliver more economically, and to consider refinancing qualified City bonds.
The Administrative group contains recommendations related to administrative adjustments in the City government. Many of these solutions could both increase revenues and decrease expenditures. The main concept of this group of recommendations is to look at this budgetary imbalance as an opportunity to reevaluate the administrative processes currently in place.
The Administrative group includes recommendations to utilize the services of independent auditors, develop a Participatory Budgeting process, increase volunteer opportunities within the City’s divisions, adjust existing fee schedules, and establish Public-Private Partnerships (PPPs).
Finally, the Community Improvement category contains recommendations that are geared toward the long-term improvement of the City. Similar to the Administrative category solutions, this category includes recommendations that seek to use this opportunity to improve the quality of life for the residents of National City. Though not immediately providing budgetary solutions, these implementation measures should lead to an increase in overall economic development, the health and wellness of residents, and home-ownership and property values. These recommendations include the establishment of Business Improvement Districts, the increased use of Strategic Community Planning, and measures aimed at increasing home-ownership.
Read the final student report delivered to the local gov/community partner.
The Sage Project Contact Info
Kristofer Patron
Program Administrator
kpatron@sdsu.edu
(619) 594-0103
University Faculty Contact
Shawn Flanigan
Public Administration
Local Government / Community Contact
Development