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Menlo Park sales tax receipts take dive

A key source of revenue for Menlo Park fell by 21 percent in the first quarter of the current fiscal year, making an already dour revenue picture even bleaker.

Sales tax revenues declined by 20.6 percent, or $335,000, in the quarter ending Sept. 30 from the same quarter in the previous year, according to tax receipts recorded with the State Board of Equalization.

That drop was higher than the 12.9 percent decline seen in the Bay Area over the same period, the 14 percent decrease in Northern California, and the 14.8 percent drop statewide, according to Carol Augustine, Menlo Park's finance director.

The decline doesn't bode well for the current fiscal year (which began July 1), as the city had expected to receive more money from sales tax in 2009-10 than it did in 2008-09.

"Business-to-business" tax revenues in the area east of Middlefield Road accounted for most of the drop, falling by 37 percent, or $263,000.

In the four-quarter period from October 2008 to September 2009, total sales tax receipts dropped by 19.4 percent from the year-earlier period. That was the largest drop in any four-quarter period since 2002, according to Ms. Augustine.

City management plans to present the City Council with a mid-year budget report at the council's Feb. 23 meeting, with recommendations on possible budget cuts to follow.