Beverly Hills Faces Financial Woes
Hard times have even come to Beverly Hills, California. The LA Times is reporting that city officials in Beverly Hills have said that the city predicts a $24-million drop in tax revenues over the next 16 months which is about 15 percent of the general fund budget. It is said to be the largest percentage budget reduction in the city's history. The city is enacting a formal hiring freeze. Other wealthy Southern California cities including Santa Monica and Newport Beach are also facing budget woes. As shopping declines so does the revenue from sales tax on all those purchases (including the sale of luxury cars). There has also been a decline in building permit and planning fees in some cities as even the wealthy are holding back on major remodels. The fallout could continue for a long time especially for California cities which rely on property taxes which may decrease as the real estate market continues to drop.
Often in hard times the wealthy enclaves are safe because visitors are spending. Out on Rodeo Drive, the street is still bustling with shoppers from around the world but they may be doing less buying and more browsing. Also many brands are advertising their wares on sale and there are more vacant stores than there have been in the area in years.