Santa Barbara Mayor Helene Schneider shared a lot of positive news in her state of the city address at the Lobero Theater on March 22 but said the city’s lack of enough revenue is concerning.

Schneider said she was encouraged by lower State Street’s growth on Cabrillo Boulevard, with construction of the MOXI museum and the soon-to-be-open Hotel Californian, and these and other projects should offset many of the downtown businesses that left over the past year.

The recent closing of Macy’s at Paseo Nuevo mall may have had the biggest impact on the city. Schneider said even though the city can’t require it, the city is asking Macy’s to shift its remaining years of its lease to a large retail tenant.

As for Santa Barbara’s housing affordability issue, Schneider said the city would continue to move forward with its average unit density program. But she said there is concern that the units being built are still not in the price range of low-income and moderate-income residents.

The lack of state and federal funding, along with a drop in sales tax revenue due to more online shopping, has the city worried.

“There’s not enough revenue to meet our infrastructure needs,” City Administrator Paul Casey said. “We need a new revenue source.” Schneider then alluded to the possibility of increasing the city’s sales tax.

There was also plenty for the city to be optimistic about as tourism continues to be a strong source of revenue.

Schneider said the city continues to improve the homeless situation on State Street, which can affect businesses. The city estimates there are approximately 800 homeless men and women on the street today, down from 1,040 in 2001.

The city is implementing several new transportation resources this summer, such as a car-sharing program, hydrogen fueling stations and expanding its electric car charging station portfolio.

Air service at the Santa Barbara Airport increased 5 percent from last year, and the airport, although hurt by airline consolidation, said it continues to actively lobby for additional flights.

• Contact Chris Officer at cofficer@pacbiztimes.com.