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State funding future, cannabis income concerns emerge in advance planning for Santa Barbara County budget

SANTA BARBARA COUNTY, Calif. - The Santa Barbara County financial engine is getting a long range review and some of the income rests on the back of specific funding areas including cannabis, hotel stays, tourism and income from state and federal sources.

The Board of Supervisors will also be in the first year of staffing the new north county jail which has an operating cost estimated annual cost of about $20 million.

The outlook is encouraging in some areas and challenging in others, in part because we are still living with pandemic impacts.

The recent UCLA Anderson forecast of economic patterns going forward indicates a solid growth for California with variables. These include issues over inflation controls, any possible government shutdown that may occur and the impact of new variants or infection rates on the public's spending confidence.

The report also says California is recovering from the pandemic at a stronger pace than the rest of the nation.

The potential for a $31 billion state funding surplus is predicted for 2022-23. The preliminary budget will be out in January and the revised budget where final decisions are made comes out in May 2022 before budgets are adopted to begin July 1, 2022.

The county report says it anticipates no department expansion requests.

The cannabis income is projected to drop from $19 million in the fiscal year 2021-22 to $17.7 million in 2022-23. This is expected due to an oversupply of cannabis in California. There's also anticipation about what the future will be for more retail cannabis businesses.

Supervisor Bob Nelson said, "at least I know in Orcutt there's a lot of concern about what the impact will be on them. If will be really helpful that with that new use there would be specific benefits to that community."

The budget also calls for ongoing funding for homeless services.

Funding from overnight stays at hotels or the transient occupancy tax is expected to continue a comeback to pre-pandemic levels. The income to the county is about 3.7 percent of the budget and the ongoing growth will be about $500,000 a year with steady growth expected.

Factors on this income include the amount of travel from the public into the Santa Barbara County area and also the availability of rooms.

Supervisor Steve Lavagnino recalls past years when the economy was down and the gap between funds and needs was extreme. Using his hands wide apart he said, "here's what our anticipated revenue is going to be  and here's   where out anticipated costs were going to be.  It was just like out to infinity  and we're never going to accomplish this."     He called it a "jaws" chart.

There's also anticipation about the retail cannabis

For more information about the Santa Barbara County Budget, click here.

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John Palminteri

John Palminteri is senior reporter for KEYT News Channel 3. To learn more about John, click here.

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