SANTA ANA, Calif. (CNS)—Anaheim and Dana Point are among the cities most affected by COVID-19 tax revenue-related losses, according to a California State Auditor report issued Nov. 18.
“We have been talking about this since September,” Anaheim spokesman Mike Lyster said. “We have shared in great detail the impact the coronavirus economic downturn has had on our city, and this is just one more thing that brings that home.”
The state auditor’s analysis showed that cities that rely on tourism and entertainment are among the most affected by the pandemic.
“Our analysis shows that, for some cities in California, COVID-19 is both a public health and financial health emergency,” State Auditor Elaine Howle said. “The revenue hit that these cities will take will worsen until the downward economic curve is reversed.”
The auditor said economic forecasts indicate that “these cities will lose general fund revenues exceeding 20 percent of their expenditures through the end of fiscal year 2020–21,” and “Anaheim is at risk of exhausting its reserves, and the remaining cities may drain reserves below recommended levels.”
Lyster said Anaheim is doing a number of things to address the situation, such as “internal cost cutting on day-to-day operations.”
Employees nearing retirement were offered “early separation programs,” Lyster said.
“We have concluded the first round of that,” he said.
“While we don’t bank on this, from where we sit now it makes sense for us to wait a few weeks to see if there is another federal [stimulus] package coming. … Members of Congress have talked about it.”
If federal lawmakers cannot produce a stimulus benefiting cities, “we would look to every option available to us—everything from cuts to some sort of financing or refinancing of existing obligations that we have that would help us bridge an interim period that will certainly be painful for our city,” he said.
But despite the concerning trend, city officials feel optimistic about a turnaround because of planned investments around Angel Stadium and the Honda Center, Lyster said.
“We believe there is a bright economic recovery path for us—we just need to get there,” he said.
Anaheim’s hotel revenue is down 24 percent from last year, but it has been cut in half going back 18 months, the spokesman said.
“It’s very clear people come to Anaheim for Disneyland, the convention center, and also professional sports, and we have not had any of that really since March, and that’s why we’re seeing the impact we’re seeing,” he said.