This fall, the La Center City Council will face some painful budget cuts for 2015 as the city appears headed for a steep budget shortfall.
Suzanne Levis, the city’s finance director, projects the city will have a shortfall of more than $524,000 in gambling tax revenue by the end of the year. With some other revenues coming in higher than expected, the city’s looking at an overall shortfall of about $494,000.
The councilors convened Tuesday evening to kick off their discussion of how to approach the deficit.
The problem emerged as a consequence of a rocky year for Chips casino. The 16-year-old card room closed in January, reopened as a night club and eventually continued running as a casino on a limited schedule before closing once more.
Levis warned the councilors that the situation means they have little choice but to raise or create new taxes. She suggested a number of options, including new excise taxes on utilities or Comcast services, but the councilors will need to take the next few months to work out their final plans.
“You’re putting all of your eggs in one basket on gambling, and it’s going downhill,” Levis said. “So, you’ve got to look at other revenue streams.”
No decisions came out of the discussion. But the councilors left with a sense that any number of services and programs could be on the chopping block, and Levis added that she doesn’t expect a rosy picture for the next budgeting cycle either.
The city has gone through more than half a decade of continual budget cuts, Mayor Jim Irish noted. Irish and the councilors also suggested that the situation puts the council in a position of questioning La Center’s direction on potential business development.
Looking to Ridgefield’s example, Irish said, the city needs to consider laying the ground for new businesses to set up near its Interstate 5 junction. He also suggested the city might consider some annexations to either bring businesses into city limits or grab some open land for development.
Councilor Joe Valenzuela said the city needs to look at how to both increase revenue and cut expenses, but the options are limited for the small city.
“Can we get another card room in here?” he said. “We have to be realistic. If we’re looking for revenue sources, and that’s our revenue source, maybe we need three more card rooms.”
Councilor Al Luiz urged his fellow councilors to keep the next couple of decades in mind as they weigh their options for solving the immediate problem this fall.
“We’re going to have to look at some really unpleasant decisions that are going to have to be made,” Luiz said. “What we can’t do is continue on the way we’re going right now.”