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Bakersfield considering layoffs, tax hikes amidst bleak financial outlook

KBAK/KBFX photo, file

The five-year financial outlook for the Bakersfield general fund does not look good.

As of right now, the city manager anticipates in just two years the general fund will function at an $8 million deficit, and in five years that deficit will grow to $16.5 million.

Assistant City Manager Chris Huot brought this to the attention of the City Council in a meeting a couple weeks ago. During his presentation, he mentioned the importance of maintaining a healthy general fund.

"Our general fund pays for fire, police, streets, code enforcement, the general city services that everyone experiences every day," said Huot.

It's important to understand the possible shortfall the city is staring down is multidimensional. No single thing caused it.

Rather, many things happened, almost all at once, which piled on top of each other making the situation worse and worse.

The events with the greatest impact on the general fund are widespread layoffs throughout many industries in Bakersfield.

"Some layoffs at the Nestle facility, State Farm will be pulling out of the market here," said Huot. "Chevron restructuring locally, so that's another 400 jobs."

The massive loss of jobs caused a drastic drop in disposable income throughout the city.

Less disposable income means less shopping, which means less sales tax paid, which means less money for the general fund.

Roughly one-third of the general fund is sales-tax driven. This lack of income combined with more and more people shopping online rather than in store is causing the city to collect less and less in taxes.

There are three ways to combat the slide in tax generation.

The first option is to make cuts.

Sixty-two percent of the general fund pays for police and fire department personnel and operations, which means those departments would be the easiest to cut from.

"(Cuts) may have to include reductions to public safety and other operations and facets within the general fund," said Huot.

Additional cost-cutting measures could include increased time between certain nonessential activities -- lawn mowing, streetscape maintenance, striping, preventative street maintenance, facility maintenance and upkeep.

Another option the city has it to pass a new Bakersfield local sales tax.

All new taxes must be voter approved, so that option can only work if it can win an election.

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