A slump in the Sacramento-area housing market could leave the city with a $4.5 million budget shortfall, forcing it to dip into reserves to pay expenses, city officials said.
The projected gap in the 2007-08 budget is due largely to lower revenue from property transfer taxes, as well as sales and utility
Budget officials have recommended that the City Council make up the anticipated shortfall from Sacramento's $30 million reserve fund. But they cautioned that such a move should be a temporary solution, especially if government spending outpaces revenues, as they are projected to do.
"Because the council has been prudent, we are able to dip into reserves, giving us time to react and plan in a calm fashion," Assistant City Manager Gus Vina said.
The council is scheduled to vote on the proposed $965 million budget June 12. The fiscal year begins July 1.
(Copyright 2007 by The Associated Press. All Rights Reserved.)