March 10, 2008
"I think the overall economic slowdown is as big of a contributor for local budget cutbacks as the real estate market," said Gary Painter, associate professor at the University of Southern California School of Policy, Planning, and Development. The state is making budget cuts, which impacts local governments, but California and its cities suffer the most during a housing and economic downturn from lower sales tax receipts and the loss of income tax from real estate investments, Painter said.