Six local business groups find themselves short thousands of dollars after the Sacramento County Board of Supervisors decided to slice $67.9 million from its budget.
The organizations play key roles in Sacramento's economic prosperity, specializing in such areas as educating local businesses on how to bid on government contracts and recruiting companies to the area.
"They bring revenue into the city and county," said board Chairman Jimmie Yee. "When they bring businesses into the city and county, that means jobs."
The cuts, which total $349,962, range from 25 percent to 50 percent and take effect Tuesday with the start of the fiscal year. For some groups, the reductions are a serious blow. Others say the majority of their financing is intact. None says its survival is threatened, but officials with the groups say their ability to help the Sacramento economy may be affected.
The reductions affect the Federal Technology Center, Northern California World Trade Center, Sacramento Area Regional Technology Alliance, Sacramento Metro Chamber of Commerce, Sacramento Area Commerce and Trade Organization and the Sacramento Convention and Visitors Bureau.
County officials said they had to make the cuts. They said they looked at each organization's ability to absorb reductions before making a final decision.
"We looked at the diversity of funding that the different organizations had,"said Rob Leonard, economic development director for Sacramento County.
Groups with a number of funding sources had their budgets cut by a higher percentage than organizations heavily dependent upon county funds for survival.
"We want them to be successful to present the best image of our community and also make money for our community," Leonard said.
But, he said, "the circumstances that we are in called for some pretty dramatic actions."
The Sacramento Convention and Visitors Bureau, which aims to attract conventions and tourists to the area, was particularly hard hit. In 2008 the bureau received $704,975 from the county. For fiscal 2009, its funding is $404,975, a $300,000 cut, or 43 percent.
"We knew there were going to be cuts coming," said Steve Hammond, bureau president and chief executive officer, but "the cut was more than we anticipated."
Hammond said his group annually brings in about $150 million in convention business to the Sacramento area.
County officials say the bureau received such a deep cut because it is able to tap a number of other sources to make up the difference in its $6.8 million budget.
Tourism and business improvement fees, which hotels assess themselves, account for 47 percent of the bureau's revenue. Other funding comes from the transient occupancy tax, membership dues, sponsorships and partnerships.
For now, officials plan to take $200,000 out of reserves to compensate for the loss.
The bureau will have to tighten its belt, Hammond said. A hiring freeze is a possible.
"We are going to be successful," Hammond said. "We really don't have any other option."
The Federal Technology Center, a technical assistance center that helps small businesses compete for government contracts, also has a tougher road ahead.
Its 2008 funding was cut 25 percent, from $19,500 to $14,625. Because the center matches its local grants from government agencies with federal grants, it will lose $4,875 from the county as well as that amount from the U.S. government.
The center's budget of $800,000 is supported only by government grants.
"That's why it's so crucial that the county be able to come onboard," said Jack Toney, who directs the center.
Toney said the $19,500 the Federal Technology Center received last year helped it provide free counseling services and seminars, helping local businesses to obtain $78.5 million in government contracts.
"It may be that we can't provide all the classes that we want to provide if we can't make enough dollars," Toney said.
To help offset the 2009 loss, Toney has sent out "request letters" to counties and cities in California to raise funding.
Toney said many similar organizations look to counties and cities for funding. "We are just one of the many that are out there trying to do the same thing," he said.
The Sacramento Area Commerce and Trade Organization – SACTO – saw the $60,000 it received this fiscal year from Sacramento County cut to $30,000.
"I've known it's been coming," SACTO Executive Director Barbara Hayes said. "We have to roll with the punches."
Hayes said the majority of SACTO's funding is still intact.
Membership dues account for 50 percent of funding. Currently SACTO, which helps recruit businesses to the region, has 480 private-sector members paying a base price of $1,250 in annual dues.
The rest of SACTO's $2 million budget is raised through advertising, events and research it does under contract.
"It's a big hit but not enormous," Hayes said of the $30,000 cut. "We will compensate."
Call The Bee's Wesley DeBerry, (916) 321-1058.
