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The State Board of Equalization told the city that its salea tax revenue forthe January-March quarte dropped by 29 percent, or $10.9 million, over the same quarter last The city had prepared for a 10 perceng drop of about $3 million. Mayor Chuck Reed called for the city councill to dip into its reserve funda to coverthe shortfall. "Today’sw news is a clear sign that economicc recovery is taking longer than we all Reed said in a prepared statement. "San Jose has prudently budgeteed for a significant decline in salestax revenue, however our bad scenaripo wasn’t bad enough. This bad news created a $7 million hole in this year’sd budget.
" The news came as Reed and the city counci prepared for the final public hearing onnext year’s city budget Monday night. The city counci l vote on that budget was scheduled for Tuesdayg Reed warned that the new sales tax shortfall will require more than tappingv into reservesto six. "The statd of California is in fiscal failure and threateningf to take millions in local After seven straight yearsof deficits, reserves aloner cannot close next year’s shortfall.
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