Support for LAist comes from
We Explain L.A.
Stay Connected

Share This

News

Coronavirus Recession Will Not Impact Cities Equally

5e94b0adf4671c00088b3301-eight.jpg
Closed storefronts in Los Angeles's fashion district. (Chava Sanchez/LAist)
LAist relies on your reader support, not paywalls.
Freely accessible local news is vital. Please power our reporters and help keep us independent with a donation today during our fall member drive.

This is no ordinary economic downturn, and it's not going to hit cities equally.

With a strong tourism and hospitality sector, for instance, "I would have used Santa Monica as a poster child for how some cities have really good financial DNA," said Bill Statler, a municipal finance consultant who spent decades working for the city of San Luis Obispo.

Last month, Santa Monica's city manager was pushed out of his job after his proposed budget cuts elicited massive public outcry. Now the city is considering laying off 337 workers.

If there's any type of California city best suited to weather the current recession, it's bedroom communities.

Support for LAist comes from

"Those cities that are highly reliant on property taxes and not sales — it's not to say that they won't suffer, but their treasuries won't get depleted immediately," said Michael Pagano, dean of the College of Urban Planning and Public Affairs at the University of Illinois at Chicago.

The divide between municipalities that rely heavily on property values versus those that do not is a Tale of Two Cities. According to a CalMatters analysis of municipal tax revenue data from 2018, the cities that rely most on property taxes are Mountain View, Pleasanton, Newport Beach and San Clemente — all wealthy.

Cities that are dependent on sales and hotel taxes are more of a mixed bag, with some well-to-do tourism destinations, but also many working- and middle-class towns with below-average incomes or cooler housing markets: South Gate, Hemet, Merced, Redding.

READ THE FULL STORY:

Our news is free on LAist. To make sure you get our coverage: Sign up for our daily coronavirus newsletter. To support our non-profit public service journalism: Donate Now.