The richest city per capita in the state, battling a rare budget deficit, may pullthe plug on free cable for residents.
With a downturn in the economy and a drop in car sales — the city’s chief revenue stream — city officials are considering ways to cut its ties to the economic roller coaster by raising business taxes or cutting perks for residents, such as free sewer and cable.
Colma, which spends almost $10,000 per resident, is facing a $1.8 million deficit, which will have to be covered by the money from its reserve fund. For revenue, the town of 1,600 residents relies heavily on a cardroom tax from Lucky Chances Casino and sales taxes from stores and car dealerships along Serramonte Boulevard. The city does not generate much revenue from its land occupied by cemeteries, according to a recent city manager report.
City leaders said recently that the decreasing car sales showed how dependent the city is on the economy and they want to diversify its revenue streams or tighten its spending.
One of the unique Colma features that may change is the benefits beloved by residents, such as free basic cable, $1 sewer charge, amyriad of free or heavily discounted recreational programs and cheap tickets to events such as San Francisco 49ers games.
Residents were not happy to hear their perks may disappear.
“We’re happy that we have free cable — it’s a big part of living in Colma,” said Ben Viz, who has been a resident for 32 years. “If they cut it off, the residents would not like that. I think Colma’s got enough money.”
Even with the recent deficit, the city’s reserves will be almost $17 million.
“The town is in a good shape, but if corrections are not made to reduce expenses and no new revenues are realized, the town’s reserves could be depleted in several years,” City Manager Diane McGrath said in a recent report. “This is the right time to be talking about this when you have the opportunity to look at these things and make some changes.”
She said one way to increase revenue is to raise the city’s $25 annual business license tax. The tax would apply to only two for-profit cemeteries.
Georgette Sarles, CEO of Daly City-Colma Chamber of Commerce, said businesses would not be happy with an additional burden.
“It’s not something businesses can readily adopt and say we understand because money is hard to come by today — everything is going up and not as much is coming in,” she said.
By the numbers
A look at Colma’s pending budget crisis.
» Proposed budget: $15.8 million
» Deficit: $1.8 million
» General fund reserve, after covering deficit: $16.6 million
» Cardroom taxes: $3.4 million, or 25 percent of revenue
» Sales tax: $7.8 million, or 56 percent of revenue
Source: City of Colma