Sales tax revenues dive in Saratoga, other areas

By Oakley Brooks

Surprise. Sales tax revenues were down 16 percent in Saratoga during July, August and September of 2001, as the slumping Silicon Valley economy met with the post-Sept. 11 consumer caution.

Surrounding cities suffered similar drops in sales tax revenues, with Los Gatos down around 14 percent, Sunnyvale 10 percent and Mountain View 12 percent. Tax receipts in the city of San Jose slipped 18 percent.

The receipts during the third quarter of this past year were compared to the same three months over 2000 to show the decline.

"The Santa Clara and San Mateo County region is one of the hardest hit areas in the state," says Mary Flynn, a client services representative at MBIA Municipal Services in Fresno. The group recently did a sales tax analysis for Saratoga and other surrounding cities.

"Saratoga is about average compared to the decline of the area," Flynn adds.

She says that restaurants and specialty stores in Saratoga have been affected the deepest, according to sales tax receipts.

The news was not much of a shock to many local business owners, who have been feeling pinched all year.

"I could see it coming," says Ann Fitzsimmons, who owns Corinthian Corners Antiques on Big Basin Way.

Fitzsimmons says her business was down about 24 percent in 2001, and that her neighbors in the Village have similarly lost around one-quarter of their revenue this year, compared to 2000.

Fitzsimmons has noticed a significant drop in foot traffic at her shop.

"On weekends, I used to have hundreds of people in here, and now it's a lot less," she says.

Dave Hernandez, the owner of Los Gatos Auto Service and the president of the Saratoga Chamber of Commerce, says his business is booming right now; but Hernandez attributes that to the demise of a lot of smaller auto shops in the area.

He says that friends from Saratoga and Los Gatos in the restaurant and construction industry have been hurt deeply by the local decline. Some local construction workers have been out of work for up to six months, Hernandez says.

The slump in tax revenues in Saratoga drew the attention of city staffers, since about 1 percent of local sales tax money filters back to the city coffers. Administrative Services Director Jesse Baloca estimates that by the end of the fiscal year in June 2002, sales tax money returned to the city will be about $246,000 less than the previous year. But Baloca says the decrease will not cause much of a wrinkle in city funding, because of an increase in other revenues this year--such as property taxes and development fees.

Fitzsimmons, meanwhile, predicts the local economy will bounce back much quicker than it did in the late 1980s and early 1990s. Then, the '89 earthquake, the closure of Big Basin Way and a nationwide recession kept business slow in the Village for more than three years.

"Things go in cycles; you just have to be able to ride out the recession," Fitzsimmons says.

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