PG’s money woes may mean higher taxes.

Pacific Grove City Manager Jim Colangelo is preparing America’s Last Hometown for what he calls the inevitable: higher taxes.

It’s an idea that was hinted at by his predecessor, Ross Hubbard, but according to Colangelo, a March 27 budget workshop was the first time the subject was dealt with head on.

“If we don’t do something now our expenditures are going to exceed our revenue.”

“Basically we laid out where the city budget is now and where it’s going,” Colangelo says. “I made it clear that if we don’t do something now our [general fund] expenditures are going to exceed our revenue.”

The solution is to raise taxes. But first, Colangelo says, PG’s government needs to regain the public’s trust. Hence the budget workshop, which was open to the public. At the meeting, Colangelo didn’t even address what types of taxes might be increased.

“Property, sales or transient occupancy taxes would be the obvious ones, but I intentionally tried to avoid talking about what kind or how much,” Colangelo says. “People have a gut reaction to those things. We wanted them to tell us what kind of things we’d need to fix before they’d agree to something like that.”

Colangelo asked meeting attendees, who broke into four working groups, to brainstorm possible solutions. He also addressed the public distrust of the City, and asked the groups how the City could reestablish that trust.

The groups said that they wanted more specific information about the city’s budget, in particular how its staff services expenses compared to other cities.

About 72 percent of Pacific Grove’s general fund is earmarked for staff services, which includes salaries and employee benefits. A little more than half of that pays for emergency services such as police and fire.

“So if we’re going to make cuts that’s where we’d have to make them,” Colangelo says.

Next, Colangelo says, the City will compile the information, and distribute it to the public. More meetings are likely, beginning in June.