With Redwood City and San Carlos voters refusing new taxes aimed at filling budget gaps and softening financial hits, residents can expect at worst a slew of cuts to services and programs — “a significant change in city government,” said City Manager Mark Weiss.

And at best?

“The status quo,” said Brian Ponty, finance director for Redwood City which failed to pass its business license tax Measure Y.

That city wasn’t banking on the tax as part of its budget assumptions but, with approximately $650,000 in new annual revenue off the table, Ponty said residents should expect the City Council to continue with adjustments already in the works before Election Day. Those changes include approximately $900,000 in annual budget cuts previously discussed by the City Council and up for another reading Monday night.

On Tuesday, newly re-elected Councilman Jeff Ira’s victory was tempered a bit by news of the measure’s failure. The hope had been the new money — on top of the existing $1.3 million the tax already brings in — would “soften the blow” to the budget, he said.

But Ponty said the city never banked on its passage and therefore doesn’t have to scramble to bridge the difference.

In neighboring San Carlos, the city also didn’t assume the passage of Measure U, a six-year half-cent sales tax increase aimed at raising $2 million annually, but its failure means residents better brace themselves for previously agreed upon cuts and the loss of up to 10 workers, said Weiss.

In May, as the City Council readied to close a $2.7 million budget shortfall with its 10th year of cuts, officials agreed to use $675,000 in Economic Uncertainty Reserves to tide them over until Election Day. With the measure’s failure, come June the city will be looking at automating the City Hall main phone number, cutting planning and building division hours, closing Cedar, San Carlos Avenue and Vista parks, reducing park maintenance, removing the Laurel Street flower baskets and reducing parking enforcement. Cuts are also planned for a building inspector, 2.5 parks maintenance workers, the youth center part-time staff and a recreation coordinator.

Full-time staff will be laid off for the first time in recent history, Weiss said.

“We drew upon reserves to get to this point. Now there’s no other clear-cut revenue option out there available to the city. We have to cut,” he said.

The City Council will talk about the budget as early as Tuesday when it decides whether to seek a fire funding restructuring with the city of Belmont. On Dec. 14, the council always planned to discuss the election results and kick off the mid-year budget review, Weiss said.

The city is also considering transferring the Healthy Cities School Tutoring Program to the school district.

Although the council already signed off on the list of cuts, changes could always be made at that meeting, Weiss said.

Weiss was not surprised the measure failed, noting the current economic climate and organized opposition which included Councilman Matt Grocott.

The silver lining, he said, was being able to educate the community more fully about the dire financial picture.

“It let us make sure everyone knew the reality and wouldn’t be surprised when changes happen,” Weiss said.

Neither San Carlos nor Redwood City can bring another tax measure back to voters before 2011 without declaring a fiscal emergency.

Michelle Durand can be reached by e-mail: michelle@smdailyjournal.com or by phone: (650) 344-5200 ext. 102.