State Auditor lists Monterey as city at risk of significant revenue loss due to COVID-19

MONTEREY, Calif. (KION) The Office of the California State Auditor has released an analysis of cities relying on tourism and entertainment for revenue that are expected to experience significant losses due to the COVID-19 pandemic.

The office said nearly all cities are expected to lose some revenue, but the ones that rely more on sales and use taxes or business license taxes are affected less, while cities relying on hotel tax revenue are hit the hardest.

They released a list of cities that rely most on hotel tax revenue that are expected to be impacted, and Monterey was among them. According to the office, hotel tax revenue makes up 37% of the total tax revenue in the city.

The office said Monterey is among 11 cities that may need to cut services and expenditures to raise revenue, and it is at risk of falling below the recommended reserve level.

COVID-19 restrictions have also led to declines in revenue in cities that collect tax on admissions to large events, airport parking or entertainment venues.

On the other hand, some California cities were listed as those likely to have enough budget reserves to help them absorb revenue reductions. Among them are Carmel-by-the-Sea, Marina, Pacific Grove and Sand City.